Ageas Nv S/Adr New

Welcome to this Azure conference call. I am pleased to present Mr. Hans de Koepper, Chief Executive Officer and Mr. Wim Gilliams, Chief Financial Officer. For the first part of the call, let me remind you that all participants will remain on a listen-only mode and afterwards there will be a question and answer session. Please note that the conference is being recorded. I would now like to hand over to Mr. Hans de Koepper and

Good morning ladies and gentlemen. Thank you all for dialing into this conference call and for joining the presentation of EGEAS results over the first half year of 2026. In the first half of the year EGEAS delivered strong growth across both live and non-live with inflows up 17% at constant exchange rate supported by excellent commercial momentum in life and the inorganic strategic initiatives we took last year. Before diving into the commercial performance, let me clarify one point on comparability. As usual, growth rates are presented at constant foreign exchange rates. For H1 2026, where relevant, we also refer to figures at constant scope. excluding the additional two months of contribution from the extra 25% in AG insurance, following the closing of the transaction in late April, as well as the contribution from Esho and Saga, which was not included in the half-year 2025 results. This provides a like-for-like view of the underlying business performance. At constant scope, The total inflows were up 8% compared to last year. In life, we continue to see strong commercial momentum with inflows increasing by more than 12% or more than 9% at constant scope across all segments. Belgium delivered another excellent performance with inflows up 28% or 14% at constant scope supported by successful commercial campaigns in both unit-linked and guaranteed. Europe recorded very strong growth as well, of 41% at constant exchange rate, driven by Turkey and Portugal. In Asia, inflows increased by 4%, supported by the successful Jumpstart campaign in China, where inflows grew by 3%, and by a strong commercial performance in Thailand, with growth of 9%. Our emerging markets also continue to deliver attractive growth, particularly in India and the Philippines, where inflows increased by 16% and 9% respectively. Non-life also continued to deliver solid growth, with inflows at more than 26%, or an increase of 6% compared to last year when at constant scope. Belgium and Europe both recorded growth of 5% supported by pricing actions, portfolio growth and strong momentum across markets. In Asia, inflows remained broadly stable, while our reinsurance business once again demonstrated its strength, delivering strong growth of 28%, driven by new business and the continued diversification of the portfolio. When looking at our results, EGL delivered a strong net operating results of €776 million in the first half of the year, translating into a return on equity of 15.8%. This performance was driven by excellent live results across all segments and resilient non-live results despite the impact from adverse weather. Live delivered an excellent performance with a net operating result of €629 million, significantly above last year. This was driven by a strong commercial momentum across all segments. The growth in net operating result was driven by a stronger operating insurance service results in Belgium and Europe, complemented by a solid contribution from Asia, further supported by higher investment results. By looking at non-live, despite severe weather events in Belgium and Portugal, our non-live business delivered a resilient net operating result of 240 million euro, supported by disciplined underwriting and healthy technical margins. Based on the strong performance delivered in the first half of the year and the continued progress of our strategic transformation, we are raising our full year 2026 net operating result guidance to above 1.95 billion euro. This updated guidance includes the 450 million euro of net capital gain and reflects a lower contribution of around 13 million euro for Malaysia sale of our stake in Epica. The guidance also includes the assumption of a full year weather impact of around 3 percentage points combined. Our operational resilience is equally reflected in our capital generation and cash creation. Operational capital generation remains strong at 1.1 billion euro, while we now anticipate a cash upstream above 1.4 billion euro from the full year 2026, significantly above our original guidance of 1.2 billion and 49% higher than last year. This increased guidance reflects a substantially higher upstream from Asia, driven by exceptionally higher dividends from China and Thailand. This strong cash generation provides a strong foundation for shareholders' returns and future growth investments. At the same time, we remain committed to our dividend policy and will pay an interim dividend of €1.5 per share in December. The first half of 2026 once again demonstrated the strength of each year. Our diversified exposure across live and non-live, developed and emerging markets, and a balanced mix of consolidated businesses and partnerships enables us to remain resilient and continue delivering value through different market cycles. To conclude, Let me briefly reflect on the progress we have made so far on Elevate 27. Egea has accelerated its data and AI agenda, deploying solutions that enhance customer service and operational efficiency across key markets. Egea's data and AI agenda focuses on two main areas, strengthening the foundations by upgrading data platforms and relying on strong governments for responsible AI, to ensure a future-proof architecture that maximizes AI value and capture value from data and AI use cases. The GIS is deploying more than 300 use cases, with about 40 identified as shareable and impactful across the group. Of these, 35% target claims and fraud, 20% focus on underwriting, Another 20% improved customer experience, and the remainder are transversal use cases, among others in IT. Halfway through Elevate 27, we have also significantly strengthened AGS through targeted acquisitions, disciplined portfolio management, and consistent operational delivery. From the 25% step-up to full ownership of AG Insurance and expanding our presence in the UK through our acquisitions of Saga and Esure, to unlocking value through the Attica transaction while investing in future growth opportunities in China through our stake in Taiping Pensions, all these actions illustrate the disciplined way in which we are executing our strategy, creating a more diversified, more scalable and increasingly cash-generative group that is better equipped to deliver sustainable growth and shareholder value over the long term. Before handing over to Wim, let me also briefly touch upon ESHORE. The integration of ESHORE is progressing well, with key integration milestones achieved, including a new and integrated management team since 2025. On October 8, at our Deep Dive event in London, we will provide a comprehensive update on both the integration journey of eShore as well as the progress we are making in delivering Elevate 27. With that, I will now hand over to Wim, who will take you through our results in more detail.

Thank you, Hans, and good morning, ladies and gentlemen, also from my side. As Hans mentioned, AGI has delivered a strong first half of 2026, The net operating result reached €776 million, up 6% compared to last year, despite a significantly higher level of weather-related claims in Belgium and Portugal, amounting to a total weather impact of €180 million. This performance was driven by a strong life result across all segments, resilient non-life earnings and excellent commercial momentum across the group. The live net operating result was strongly up, plus 17% compared to last year, driven by an excellent insurance result illustrating the quality of the business in all segments. In Belgium, the live net operating result was up plus 20% at constant scope, significantly higher than last year, driven by a higher operating insurance service result, further supported by net capital gains, resulting in a live guaranteed margin of 106 basis points, up 14 basis points compared to last year. In Europe, the LiveNet operating result was up 33% compared to last year, driven by an excellent performance in both Turkey and Portugal, thanks to a higher CSM release and a continued solid result on short-term life. In Asia, the LiveNet operating result increased at 6%, driven by a higher CSM release and a positive development in experience variances. The CSM balance increased from €9.4 billion at year-end 2025 to €11.1 billion at the end of June, driven by a strong operating CSM movement corresponding to a growth rate of 3.6% are further supported by the 25% step-up to full ownership of AG insurance. Looking at the drivers of the life value of new business, the present value of new business premium showed strong growth, up 15% at constant foreign exchange rate, driven by Belgium, Portugal, and China. Group life new business margins stood at 7.9%. This margin was mainly impacted by the new product mix in China and higher sales of invest products in Belgium. In Belgium, the new business margin is expected to recover towards normal levels by the end of 26. Moving now to non-life. The reported group combined ratio stood at 95.2% compared to 92.1% last year. This increase was driven by a significantly higher weather impact, which added around 5 percentage points to the combined ratio, compared with around 1 percentage point last year. Excluding weather, the underlying combined ratio remained strong, demonstrating the continued quality of the non-life portfolio. Despite the significant higher impact from adverse weather of around 180 million euro, The non-life net operating result remained resilient, amounting to €240 million. The non-life net operating result in Belgium stood at €75 million. As mentioned, the result was impacted by severe storms and hail in late May and June, which had an impact of €59 million. Thanks to a well diversified portfolio, the impact was partly offset. In Europe, the combined ratio increased compared to last year, mainly due to storms in Portugal at the beginning of the year. These weather events added 3.5 percentage points to the combined ratio compared to less than 1 percentage point last year. The weather impact was partially offset by the strong growth in the results in accident and health. In Asia, the non-life net operating result increased mainly driven by typing RE supported by an improved combined ratio and a stronger investment response. Finally, in reinsurance, the net operating result was also impacted by the severe weather in Belgium and Portugal as shown in the results from group purchasing and from capital management. Combined ratio of the reinsurance third-party business, on the other hand, stood at a strong 82.1%, supported by strong business growth and favorable claims developments. The non-life net operating result in reinsurance third-party business increased considerably. This growth was achieved in a softening cap market where we remain disciplined while selectively expanding into specialty lines where we see attractive risk-return opportunities. Let me now turn to the balance sheet and cash. Regarding the balance sheet evolution, our comprehensive equity increased by €2.2 billion to €19.7 billion. This was supported by the strong earnings contribution and the 25% step-up to full ownership of AG Insurance. Shareholders' equity stood at €10.2 billion. Our cash position stood at a solid €1.2 billion. The decrease compared with year N25 mainly reflects our dividend payment and the financing of the acquisition of the remaining 25% stake in AG Insurance, partly offset by higher dividend upstreams from our operating entities. For the full year, cash remittances are expected to amount to more than €1.4 billion, of which more than €1.1 billion has already been received in the first half of 2026. This includes exceptionally high dividends from China and Thailand, as well as increased remittances from other segments, highlighting our group's increased ability to convert earnings and capital generation into cash at group level. To conclude, I would like to add a word on solvency and operational capital generation. The Solvency II ratio stood at 195% at the end of June, lower compared to year N25. The movement mainly reflects a number of previously flagged items. The closing of the typing pension capital increase with an impact of around minus three percentage points. The end of the grandfathering of the fresh instruments around minus four percentage points. The repayment of two debt instruments with an impact of minus three percentage points. and the downgrade of the Belgian sovereign debt with an impact of around minus eight percentage points. The insurance operations contributed plus 12 percentage points. It is important to mention that the recently announced sale of our Malaysian activities will add 23 percentage points to the solvency at the moment of closing. The solvency of the non-solvency two scope companies stood at 230%. This mainly reflects the interest rate environment in China, the capital consumption linked with the strong new business growth and the increased equity exposure. Operational capital generation remains strong at 1.1 billion euro in line with last year's strong performance despite the impact from adverse weather. This demonstrates the resilience of the group capital generation capacity and the quality of the underlying operating performance. In the Solvency II scope, operational capital generation proved resilient and increased compared with last year, reaching €558 million despite the weather impact in Belgium and Portugal. In the Non-Solvency II scope, operational capital generation stood at €627 million. The operational free capital generation, including both the Solvency II and Non-Solvency II scope, amounted to €484 million impacted by an increased operational capital consumption in Belgium, Europe and China. I've now reached the end of my presentation and we are ready to answer any questions you may have.