Swiss Life Holding AG

Ladies and gentlemen, welcome to the Swiss Life presentation of the Half Year Results 2026 conference call and live webcast. I am Moira, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. Kindly note that webcast questions will be answered after the call. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Matthias Aellig, Group CEO of Swiss Life. Please go ahead, sir.

Dear analysts and investors, good morning. Thank you for joining us and welcome to our half-year 2026 conference call. I will give you a brief overview before handing over to our CFO, Marco Gerussi. I'm pleased with the operational performance and with what we have achieved in the first half of the year. We grew the fee income and the fee result across all businesses, meaning asset managers, IFAs and the unit-linked business. We grew the insurance business, its operating result and the contractual service margin. Our strong results show the great commitment of our employees and advisors. I would like to thank all of them for their strong engagement and our customers for their continued trust and loyalty. Let me provide some more color on our performance in the first half of 2026. The fee result amounted to 430 million, 11% above the prior year period. The growth is prop based and includes a gain from the transfer of the international network to a partner earlier this year. Profit from operations increased by 8% in local currency to 967 million Swiss francs. Net profit was also up 8% to 649 million despite a higher tax rate. Return on equity was at 20.2%. Cash admittance to the holding company was 1.2 billion, up 5% year on year. As previously announced, the acquisition of the Thales Group was successfully completed on 1st of July, 2026. This means that Thales will be reflected in the figures starting in the second half of the year. Let me move on to Swiss Life 2027. We are in the middle of our three-year strategic program and are highly committed to execute it with discipline. We are well on track to deliver all our strategic actions and achieve all our financial ambitions. In May 2026, we completed our 750 million share buyback. and we are pleased to announce today a new buyback of 250 million, which runs from October 2026 to March 2027. Looking beyond our 2027 program, we aim to further expand our business profitably, exploit market opportunities and increase operational efficiency, among others by leveraging the advancing digitalization. This also includes a reduction of around 600 positions by the end of 2028, largely through natural attrition. Roughly half of the positions are at Swiss Life in Switzerland and half at Swiss Life asset managers, mainly abroad. This measure is expected to generate annual cost savings of around 150 million in 2029 and beyond. With that, I hand over to Marco, who will provide more details on the half-year financial results and the Swiss Life 2027 progress reporting.

Thank you, Matthias, and good morning, ladies and gentlemen. Let me continue today's presentation by taking a closer look at our 2026 half-year result. We begin with the selected P&L figures shown on slide 6. Insurance revenue was stable at 4.5 billion. Higher CSM release of 617 million and high revenue contributions from Switzerland and Germany were largely offset by FX translation effects. Insurance service expenses were stable at 3.8 billion. Higher expenses in line with business growth were offset by favorable FX effects. The net investment result increased to 290 million. As a reminder, this is an IFRS 17 accounting figure, which includes various items. In view of our investment performance, we continue to focus on the net investment income, which we will discuss later. Profit from operations increased by 8% in local currency to 967 million, driven by both a higher fee result and a higher operating result from insurance business. Borrowing costs decreased to 75 million, primarily due to some double-carry expenses in the prior year period. Income tax expense increased to 243 million, mainly due to the step-up in the corporate tax rate for large corporates in France and a higher taxable profit base. Net profit increased to 649 million, up 9% in local currency, despite the higher tax rate. As shown on the slide, profit from operations and net profit include a gain from the transfer of the network business in international to a partner earlier this year, amounting to 29 million and 23 million respectively. Turning now to further selected figures. Gross written premiums, fees and deposits received increased by 3% in local currency to 12.3 billion, supported by strong growth in Switzerland. The fee and commission income increased by 7% in local currency to 1.3 billion. Growth was achieved across all businesses, meaning asset managers, owned IFAs, and owned and third-party products and services. The net investment income of the insurance portfolio for owned risk strongly increased from 1.6 billion to 2.4 billion, driven by equities, infrastructure, and ethics hedging effects. Operating expenses excluding variable expenses slightly increased to 1 billion, including investments in growing fee businesses and expenses related to efficiency measures. I will now move on to our segment reporting, starting with Switzerland. Premiums increased by 7% to 6.8 billion, whereas the life insurance market was flat. Premiums in group life increased by 7%, while the market was down by 2%. Single premiums grew by 16%, driven by higher premiums from existing clients and new business. Periodic premiums decreased by 1%. Assets under management in our semi-autonomous foundations increased to 8.6 billion from 8.4 billion at year-end 2025. Premiums in individual life increased by 7%, the market increased by 5%. Our growth is the result of higher unit-linked single premiums up 20% year on year, while periodic premiums were down 1%. Fee and commission income was up by 11% to 196 million, mainly due to higher income from unit-linked business and from investment solutions for private clients. The segment result increased by 2% to 469 million due to a higher operating result from insurance business. A higher CSM release in the individual life business is partly offset by lower income from assets not acting insurance liabilities. The fee result was flat at 27 million. Higher income was offset by investments in continued growth initiatives, such as investment solutions for private clients, which we mentioned in previous disclosures. Cash remittance was slightly lower at 602 million in line with the statutory profit in 2025. Turning now to France. Please note that all figures quoted are in euros for our French, German and international segments. In France, premiums were flat at 4 billion while the total market was up by 9%. In our live business, premiums grew by 2% driven by the pension and protection business. The overall market grew by 10%. The unit-linked share in our live premiums increased to 73% compared to the market average of 39%, reflecting our focus on unit-linked solutions. Overall, we generated live net inflows of 1.2 billion. Total market net inflows were 36.5 billion. In health and protection, our focus on profitability before growth resulted in a 5% decline in premiums. The market was up by 6%. P&C premiums were flat. Fee and commission income rose significantly by 14% to $336 million due to a higher unit-linked fee income based on higher average unit-linked reserves. The contribution from structured products also increased. The segment result grew by 9% to 228 million. The fee result was up by 10% to 117 million due to the unit-linked business. As mentioned in previous disclosures, the segment result contribution from structured products continues to be largely reflected in our operating result in endurance business, where it emerges over time. The operating result from insurance business was up by 8% to 111 million, supported by the contribution from the health and protection business. Cash remittance decreased by 12% to 160 million due to the step-up in the corporate tax rate in France impacting the 2025 statutory profit. Moving on to Germany. Premiums were up by 3% to 777 million, driven by higher periodic and single premiums. The market was down by 4% due to lower single premiums. Fee and commission income increased by 10% to 465 million, driven by our own IFAs. The number of financial advisors increased to around 6,300, 5% higher compared to the prior year period. Our insurance business also contributed positively. The segment result was up by 4% to 125 million. The fee result increased by 6% to 85 million, driven by owned IFAs, despite an increase of the commission ratio and continued investments in the back office digitalization. Operating result from insurance business was stable. Cash remittance increased to 166 million and includes a special dividend of 60 million, resulting from a legal structure optimization. As previously announced, the closing of the acquisition of the Thales Group was successfully completed on 1st of July 2026 and Thales is therefore not reflected in the 2026 half-year figures. Turning now to the international segment. Premiums decreased by 8% to 1.3 billion. Premiums from corporate clients increased by 3% more than offset by lower premiums from the private client business. The fee and commission income was stable at 190 million. Higher income from owned IFAs, mainly in the UK, was offset by the network business transferred to Generali earlier this year. The segment result rose by 43% to 92 billion. This is largely due to a gain of 32 million in the fee result from the mentioned transfer. Please note that the gain is a non-cash item. Related cash proceeds are expected over the coming years, starting from 2027. The operating result in June's business increased by 11% to 20 million, driven by corporate clients. Cash remittance was up by 16% to 70 million due to the 2025 statutory profit. Let's move on now to our asset managers, which reports in Swiss francs. Asset managers' total income increased by 5% to 519 million, driven by both PAM and TPAM. In PAM, total income grew by 5%, mainly reflecting higher non-recurring income from real estate transactions. In the TPAM business, total income increased by 4% to 339 million. Recurring income across all asset classes grew strongly by 7%. Non-recurring commission income also increased. This is part of the offset by lower other net income from real estate project developments. The total non-recurring income had essentially zero non-cash items compared to a share of three-quarters non-cash components in the prior year. The share of total non-recurring income for TPAM, meaning commission income and net income from real estate project development, was 11% compared to 14% in the prior year period. As mentioned at our full year result disclosure, for each year 2026 and 2027, we expect to achieve a share of around 25%, which is in line with our Swiss Life 2027 targets. The segment result increased by 4% to 152 million. The contribution from PAM increased by 6% to 101 million, driven by the higher income. The TPAM contribution increased by 2% to 51 million. Higher commission income was partly offset by lower income from real estate project development and expenses related to efficiency measures. The TPAM cost-income ratio stands at 72% compared to 82% in the prior year period, driven by a higher commission income. Cash remittance decreased by 3% to 232 million, in line with the lower 2025 statutory profits. New assets in our TPAM business amounted to 7.2 billion in the first half of 2026 compared to 13.2 billion in the prior year period. We saw continued strong inflows with real assets contributing 1.4 billion. The rest of inflows are mainly driven by equity and money markets. Assets under management in our TPAM business increased from 146 billion at year end 2025 to 158 billion driven by positive net inflows and performance. Let's move back to the group. Operating expenses increased by 2% in local currency to 1 billion, reflecting growth, continued investments in business growth and expenses related to efficiency measures. As outlined at our investor day 2024, we aim to keep life absolute costs stable by 2027 at ¾ of a billion. For the half year 2026, life absolute costs amounted to 355 million and were slightly below the prior year level. With that, we are well on track with our 2027 target. Coming to the investment income. Direct investment income was at 2 billion. The reduction was due to lower income from infrastructure and FX rate movements. And real estate income was down primarily due to a lower asset base. The non-annualized direct investment yield was at 1.4% compared to 1.5% in the prior year period. The net investment income strongly increased to 2.4 billion due to net capital gains driven by equities, infrastructure, and FX hedging effects. The net investment yield was up to 1.7% compared to 1.2% in the prior year period. Let us continue with our insurance investment portfolio on slide 15. Assets under management remained stable at 143 billion compared to year-end 2025. Real estate fair value changes were positive at around 0.4%, driven by our Swiss real estate portfolio, Partly offset by lower fair values outside of Switzerland. For the full year, we expect overall positive fair value changes to double compared to the current level. Real estate continues to be an attractive and important asset class for backing our long-dated liabilities in the context of our disciplined asset and liability management. We hold real estate because of the regular rental income it provides and not because of appreciation. Vacancy rates were lower at 2.8% compared to 3.1% at the end of 2025. Moving on to insurance reserves on slide 16. Insurance reserves increased 1% in local currency to 183 billion compared to the end of 2025. On a statutory basis, in total, we released about 0.15 billion of statutory reserves in the Swiss group and individual life businesses as we did in the previous years. Moving on to the CSM development. As outlined at our investor day 2024, our ambition is to increase the CSM through operating growth. In the first half of 2026, this growth amounted to 0.2 billion. Expected business contribution and new business together amounted to 0.7 billion. We generated another 0.1 billion in experience adjustments, mainly from work on our portfolio. CSM release increased to 0.1 billion. The pre-tax CSM release ratio was at 7.6% and therefore slightly lower than in the prior year period. In total, the CSM after release, representing future shareholder profit contribution, grew from 15.3 billion at year end 2025 to 15.6 billion at half year 2026. Shareholder's equity decreased to 6.3 billion largely due to the dividend payment and the completed share buyback, partly offset by the profit for the first half of the year. Our total outstanding financing instruments amounted to 6.2 billion. The average ratio stood at 25% for the half year 2026 at the midpoint of our reverence level of 20 to 30%. The SST ratio was estimated to be around 215% at the end of June 2026, and with that well above the ambition range of 140 to 190%. Compared with the SST ratio at 213% at the end of 2025, the ratio increased, reflecting the positive performance of equity and real estate markets, partly offset by the widening of the interest rate differential between Swiss franc and the US dollar. That brings me to our Swiss Life 2027 program and the progress reporting. As mentioned by Matthias, we are well on track to achieve all our 2027 financial targets. Let's go through the details and I will start with the fee income on slide 22. Fee and commission income increased by 7% in local currency to 1.3 billion. Own and third-party products and services were up 9% and both our own IFAs as well as asset managers grew by 8%. Profit from operations was up by 8% in local currency to 967 million as a result of growth in both the fee result and the operating result insurance business. The fee result includes the gain from the transfer network business in our international division. The operating results from the insurance business increased by 4% in local currency to 600 million. The main drivers were the higher CSM release as well as higher additional contributions, primarily driven by the French health and protection business. The return on equity was at 20.2% on an annualized basis compared to 17.6% in the prior year period. Turning to capital and cash. Cash remittance to the holding company increased by 5% to 1.2 billion, which includes the mentioned special dividend in Germany. At the end of June 2026, liquidity at holding amounted to around 1.1 billion. Today, liquidity at holding stands at around 0.65 billion, reflecting the 500 million Euro senior bond issued for the daily purchase price payment and business growth. Our share buyback, which we started in December 2024, was completed in May 2026. We repurchased shares worth 750 million. And we are pleased to announce today a new share buyback program of 250 million. We will start repurchasing shares on 1st of October 2026 and expect to complete the share buyback by the end of March 2027. The buyback will be executed by a partner bank through a second trading line over the course of six months. Shares repurchased under this program will be proposed for cancellation to the upcoming AGM. Now to the financing. More than half of the share buyback will be financed from cash at holding. The remaining part is financed from repatriations. Let me summarize. In the first half of 2026, we achieved strong growth in premiums as well as in fee and commission income. Fee result, operating profit from insurance and our net profit all increased significantly. Return on equity is on a high level, cash remittance is on track and our SST ratio is well above our ambition level. Looking at our Swiss Life 2027 program, all our financial targets are well on track. and today we announced a new share buyback. We are convinced that with our determination, our diligence and our discipline, we will achieve all our group financial targets. And with that, I'm handing back to you, Matthias.