Aegon Limited

Good morning, everyone. Thank you for joining us for this conference call on EGON's first half-year 2025 results. I'm Yves Cormier, Head of Investor Relations, and joining me today to take you through our progress are EGON CEO, Lars Friese, and TFO, Duncan Russell. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. And with that, I would like to give the floor to Lars.

Thank you, Eve, and good morning, everyone. I want to start today's presentation by informing you about the next steps in Agon's transformation and running through our commercial developments before Duncan will address our results in more detail. So let me begin on slide number two with the key messages. Our strategy is to grow and transform our businesses, and we made good progress in doing so during the first half of 2025. We are on track to deliver on our strategy and on all our targets. Our operating result was 845 million euros, up 19% compared with last year. This increase was mainly driven by profitable business growth and less unfavorable claims experience in the US, but also in the UK and in our international segment. Operating capital generation before holding and funding expenses amounted to 576 million euros, decreasing by 2% over the same period. New business strain increased, especially in our U.S. strategic assets, as we grew the business. Commercial momentum remains strong across our key markets, leading to higher new life sales and more net deposits. The capital position of our operating units remains strong and above their respective operating levels. Furthermore, in the U.S., we have extended the hedging of the variable annuity portfolio to cover part of the base fee exposure, which reduces our exposure to downward equity markets further. Cash capital at holding totals over 2 billion euros following the receipt of planned remittances from all our units and the completion of 150 million euro share buyback in the first half of the year. On the back of the solid performance, we have increased the interim dividend by 3 cents compared with last year, to 19 cents per common share. Furthermore, today we announced a 200 million euro increase to the current share buyback program, which began in July. In total, we will buy back 400 million euros of shares during the second half of 2025. This once again demonstrates our ongoing commitment to return excess capital to shareholders, unless we can invest it in value creating opportunities. And it is consistent with our plan to reduce our cash capital and holding to around 1 billion Euro by the end of 2026. Today, we are also announcing a review of potential relocation of our head office to the US. I will now move to slide number three to provide you with some background on this review. This is an important step in the transformation of our company. In recent years, Agon's business in the United States which accounts for approximately 70% of Agon's operations, has become Agon's primary market and central to the company's strategy and long-term growth. A relocation of Agon's legal domicile and head office to the United States is a logical step. It is expected to simplify Agon's corporate structure as it would align its legal domicile, tax residency, accounting standard, and regulatory framework with the geography where it conducts the majority of its business. Moreover, bringing the head office closer to our largest market allows much closer cooperation between the holding and its main business unit, which is an important enabler to grow successfully in the long term. As part of the review, we will evaluate the additional advantages that would come with being a US-based company. This includes the impact on all of AGON's stakeholders, and of making our listing on the New York Stock Exchange a primary listing alongside our Euronext listing. Another key component of this review is the implementation of US GAAP reporting, which is a complex process which would likely take two to three years to complete. Preparations for the implementation have begun. We aim to share the outcome of this review at our Capital Markets Day on December 10th of this year. With that, I will now move on to slide number four to discuss our recent commercial performance, starting with the Americas. We continued to deliver on Transamerica's transformation, growing our strategic assets during the reporting period. World Financial Group recorded a 14% increase in its number of licensed agents to over 90,000, thanks to successful recruiting efforts and improved retention. The productivity of the agents selling life insurance products increased mainly from higher average premiums for policy. This offset a slight reduction in the number of multi-ticket agents, while it led to an increase in Transamerica's market share in WFG's US life sales. This higher agent productivity at WFG was one of the key drivers of the 13% increase in new life sales in our individual life business. We also recorded strong growth of new life sales in the brokerage channel, driven by the successful launch of a fully digital experience of a whole life final expense product last autumn. Furthermore, we continue to see steady growth in the Ryla product, where net deposits nearly doubled compared with last year. In the savings and investment segment, we recorded solid net deposits in our retirement plan business over the reporting period. This was driven by mid-sized plans, partly supported by the onboarding of a large pooled plan. Written sales continue to be strong, which we see as a positive indicator for future growth of our book. Finally, we realized further growth in the general account stable value product and in IRAs as we work to increase profitability and diversify revenue streams in the retirement plan business. Let's move on to slide number five, for an update on the other units. At Agon UK, we continue to make progress on the strategy we presented at the teach-in in June of last year. Deposits in the workplace platform can be lumpy, and in this period we benefited from the onboarding of a larger scheme. The advisor platform business continued to be adversely impacted by ongoing consolidation and vertical integration in non-target advisor segments. In the international segment, our joint ventures in Brazil, China, as well as Spain and Portugal, all generated higher new life sales. This was partially offset by lower sales at TLB as a result of changes in the competitive landscape in Singapore. Egon Asset Management reported solid third-party net deposit during the reporting period. Net deposits in the global platforms business were mostly attributed to alternative fixed income products. Strategic partnerships net deposits were driven by a Chinese joint venture, which benefited from collaboration with the consumer finance platform. I will now hand over to Duncan to discuss our financial performance in more detail.

Thank you, Lars. Let me start with an overview on slide seven. In the first half of 2025, the operating results increased by 19% year on year, mostly reflecting an improvement at Transamerica. Operating capital generation before holding, funding, and operating expenses decreased by 2% over the same period, mainly driven by higher new business strength. Free cash flow in the first half of 2025 amounted to €442 million, and this is a significant increase compared to the €373 million generated last year. Cash capital at holding remains very healthy, standing at €2 billion per the end of June, allowing us to announce an increase of our ongoing share buyback program. On a per share basis, valuation equity, which consists of the sum of shareholders' equity and the CSM balance after tax, decreased by 5% in the period, mostly from the impact of unfavorable exchange rate movements on the group CSM, which were partly offset by a strong net result. Exchange rate movements were also the driver for the reduction of gross financial leverage, And lastly, the group solvency ratio decreased by five percentage points compared with year end 2024 to 183%, mainly from the new share buyback program and the reservation of the 2025 interim dividend. Using slide eight, I will address the development of our IFRS net results in the first half of 2025. The operating results amounted to 845 million euros, coming in at the top end of the 750 to 850 million run rate range we had indicated with the full year 2024 results. In the U.S., the operating result improved materially year on year to $685 million within our guided range of 650 to 750 million. The result benefited from growth in our strategic assets, notably the protection solutions business, with some offset in distribution where the operating margin fell in the first half of 2025 as previously flagged as we invested further in the business. We had an improved result in financial assets because of less unfavorable experience variances from onerous contracts. Claims experience was largely offset by reserve releases. Unfavorable reserve changes due to premium variances that we saw in the U.S. in the second half of 2024 continued into the first half of 2025 as we previously flagged, but to a materially lesser degree. The operating results of the UK increased, benefiting from business growth and favorable markets. In the international segment, the operating results increased mainly from a higher CSM release in TLB and Spain and Portugal. Agon Attic Management's operating results, as well as that of the holding, was broadly stable compared with the same period of last year. Moving on, non-operating items were in aggregate favorable in the period, driven by hedging results recorded in fair value items. Other charges amounted to 207 million euros, mostly because of the assumption updates in the U.S. and at TLB to address the experience we've recently seen. Finally, we booked a 50 million euro contribution from our stake in ASR. Looking forward to the second half of the year, we are increasing our guided operating results range for the U.S. by $50 million to 700 to 800 million. but we're keeping the group guidance at 750 to 850 million euros, reflecting the current exchange rates. I'm now moving on to slide nine. Based on the strong net result and a positive contribution of the assumption updates to OCI, shareholders' equity increased slightly over the period. The CSM balance decreased over the period, mostly because of unfavorable currency movements. In US dollars, the CSM of our strategic assets in the US increased thanks to profitable new business while the CSM of our financial assets decreased due to the runoff of the book, the impact of claims experience, as well as the impact of strengthening policyholder behaviour assumptions. Outside the US, the changes to the total CSM balance were limited, with the UK CSM decreasing modestly on a local currency basis and the international segment CSM increasing modestly from assumption updates. Overall, valuation equity per share decreased by 5 percentage points over the first half of 2025 to €8.47 per share, mostly due to the exchange rate development. Slide 10. Operating capital generation, or OCG, decreased by 2% compared to the first half of 2024. OCG from the US decreased by 4%, or 3% in US dollars, OCG from the strategic assets decreased as our investments in business growth drove higher new business strength. OCG from the financial assets increased, mostly from higher fees as bearable annuity account balances increased on the back of favourable markets. Furthermore, claims experienced in the period was less unfavourable than in the same period last year and included $86 million of unfavourable mortality, largely related to the universal lifeblood. Looking through the unfavorable claims experience in a period, we continue to observe a quarterly OCG run rate for the Americas of around $200 to $240 million. The OCG benefited from favorable markets as well as favorable non-recurring variances. The international segment reported lower OCG with improved underwriting experience in TLB being offset by lower OCG from China. Agon Asset Management's OCG was stable compared to the same period of last year. Looking ahead, we continue to expect OCG before holding, funding, and operating expenses of around 1.2 billion euros in 2025.