Mapfre Sa Unsp/Adr

Good afternoon and welcome to MOPFRE's activity update for the first half of 2025. This is Leandra Clark, Head of Investor Relations and Capital Markets. Thank you for joining us today. We are pleased to have here with us Jose Manuel Enchausti, Vice President of MOPFRE, who will provide some opening remarks and an overview of recent business trends. Following that, Jose Luis Jimenez, our group CFO, will discuss the main financials, and Felipe Navarro, Deputy General Manager of the Finance Area, will walk us through the balance sheet. As a reminder, we report IFRS financial information twice a year, and we have reported the half-year accounts to the CMV this afternoon. The information in this activity update is prepared under the accounting policies applicable in each country, which generally do not apply IFRS 17 and 9. Jose Luis will also go over the main IFRS KPIs during the presentation. You can use the Ask a Question link at any point, and we will open up the question and answer session at the end of the call. I will now hand the floor over to José Manuel Enchausti.

Thank you, Leandra. Good afternoon, everyone, and thank you for your time today. Let me share some highlights of the quarter before José Luis and Felipe walk you through the details. We are at the midpoint of our three-year strategic plan, and Jim's figures are proof of the progress we have made. We are delivering figures in line with almost all updated targets announced at the AGM except growth, although it remains strong in local currencies. Recent exchange rate movements from the current macro and geopolitical situation have impacted our top line, especially the US dollar and Latin America currencies. Premiums have still grown over 5%, reaching 16 billion, a 10% increase at constant exchange rates. Non-life, which is approximately 75% of our business, continues to benefit from pricing adjustments. Premiums in this segment are growing 7.5% at constant exchange rates, 2.5% in euros, reaching over 12 billion. The live business, which accounts for about a quarter of our premiums, is up 16% in euros, over 20% at constant exchange rates. The non-live combined ratio is now... Premiums in this segment are growing 7.5% at constant exchange rates, 2.5% in euros, reaching over 12 billion. The life business, which accounts for about a quarter of our premiums, is up 16% in euros, over 20% at constant exchange rates. The non-life combined ratio is now 93%, down 2.6 points, with a strong reduction in the claims ratio to 66%, and an excellent 27% expense ratio. The net result is up nearly 24%, reaching 570 million, with an adjusted return on equity of 13.3%. Our capital base remains strong despite market volatility, with shareholders' equity at 8.5 billion and the solvency ratio at 205.6% at the end of March, in line with our target. The main rating agencies recognize our financial strength as seen with the recent change in our outlook by Standard & Poor's to positive following Fitch's action last March. The implementation of our strategic plan is progressing and core businesses are performing extremely well. Overall, Iberia has an excellent contribution to results with €239 million, up 42.4%, thanks to its diversified business mix with motor, now in positive territory, as well as a strong contribution from general property and casualty and the life business. We have made significant strides in technical management, with the motor combined ratio improving by 8 points to 98.4%. In Latam, performance has been outstanding, and most countries now have combined ratios below 100% and improving, except in hyperinflationary markets. The largest challenge we are facing in the region right now is currency volatility. We have been operating in these markets for many years and are confident that our diversified business model will continue to prove resilient. Brazil has had an excellent quarter with a net result of 131 million and there have also been important contributions from Mexico, Peru and Colombia. Both the non-life and life businesses are highly profitable and financial income continues to be a tailwind. The region reported a total result of 223 million up 10%. North America is reporting one of its highest half-year results with 60 million euros up 48%. Technical measures are paying off with a relevant improvement in motor and solid profitability in general property and casualty. Finally, In March-February, a prudent approach to underwriting, diversification and retrocession continues to deliver solid results. We continued increasing prudence during the quarter with our reserves in the upper end of our confidence interval. This is due to a conservative approach as we go into the second half of the year. Performance was strong with a net result of 149 million and a combined ratio under 96%. In conclusion, these results are quite strong. And I will now hand the floor over to José Luis to walk us through the details. José Luis, please.

Thank you, José Manuel, and good afternoon. Before moving into the details of the local figures, I would like to briefly comment on the main KPIs and the IFRS compared to Local Gap. Insurance revenue, which reached a little over $13 billion, is up over 3%. The net result stands at $596 million under RFS, $26 million higher than local cap. RFS 17 had a $62 million positive impact. Positive yield movements and other adjustments offset a small impact from the lost company. RFS 9 had a negative $36 million impact due to the realized gains on equity recorded on the OCI, as well as a slightly negative mutual fund valuation impact book in P&L. The holders' equity amounts to 8.9 billion, with similar trends as on the local GAAP. The gross TCM was 2.5 billion euros, 1.6 after tax and minorities, and has been relatively stable during the year. The 91% combined ratio under IFS has improved, down 2.5 points. The return on equity stood at over 12% under IFS. As you can see, most IFS figures are very aligned with trends on the local accounting. Further disclosure can be found on the annexes of the presentation and are available in our half-year accounts on our website. I will now discuss the key trends of our region and the local accounting, complementing the figures already provided by José Manuel. In Iberia, total premiums are growing 13%, with strong trends in most lines of business. Non-life is up nearly 5% and life premiums are up 34%. The combined ratio has improved over 4 points to 96%. The returns on the investment portfolio continue to boost profit. The return on equity is now around 14%. Profitability in LATAM has been excellent, with a return on equity over 18%. Brazil continues to see excellent results, posting a return on equity of over 27%, with improved technical ratios and high investment returns. the non-life combined ratio is around 72%. Local currency, business volumes were flat, with life and agricultural segments still affected by higher interest rates and the macro and geopolitical context. Premiums in euros are down 11%, with a strong impact from the Brazilian real. Odelatam continues to show strong profitability, contributing almost 93 million, up 13%, with technical improvements across the region, with an almost 4% reduction in the combined ratio to 95%. Premiums are up 3% in euros, with most countries growing in local currency. North America, premiums are down 1% in euros, impacted by US dollar depreciation. The combined ratio is 96.5%. improving around three points driven by underwriting measures and significant tariff increases implemented in recent years. In EMEA, losses are down significantly, especially in Germany, upsetting the target leader depreciation. The region is now reporting a 3 million profit compared to an 8 million loss last year, with a six point reduction in the combined ratio. Regarding mafia RE, Jose Manuel has already gone over the main figures. In terms of growth, premiums are up around 1%. The US dollar is relevant for the business and premiums will be up nearly 5% at cost and exchange rate. I would also like to comment that the main event were the California wildfires in the first quarter, which had an 84 million euro net impact in RE. with little change in the second quarter. Recently, reformers of reserve had a four and a half point impact on the combined ratio. Modi continues to contribute positively. Lastly, I would like to address two specific items. Hyperinflation adjustment has improved from around 36 million last year to 16 million this year, mainly due to Argentina. As a reminder, last year there was a 25 million positive tax impact, which mainly affected the holding and to a lesser extent the ivory business. General P&C lines remain strong across all markets, benefiting from technical discipline, strong market positions and diversification. Premiums are slightly down, affected by currencies, and the combined ratio is excellent, around 81%. In Iberia, premiums have risen by nearly 6%, with growth in more segments and strong performance in commercial lines. The combined ratio was fairly stable at 95%. In Brazil, premiums are down 7% in euros, but growing 5% in local currency. Agriculture issuance is still affected by the macroeconomic and geopolitical situation, while all the retail and industrial lines are experiencing notable growth. The combined ratio has improved to 63.4%. This excellent level is supported by the solid agro ratio, which is down year on year and in the low 50s, with a lack of relevant events as well as strong performance in other retail lines. In North America, premium growth is impacted by the dollar depreciation while stable in local currency, supported by prior year tariff adjustments and other technical measures. Regarding MOTU, first-half results confirmed the turnaround seen in the first quarter. The combined ratio is now around 99%, with a 5-point improvement year-on-year, and the net result is 89 million compared to 19 million losses last year. In Iberia, the combined ratio is now around 98%, and these positive trends should continue. Premiums are growing almost 4% and reflect average premium growth of nearly 8%. In Brazil, premiums are down mainly due to the currency depreciation. The combined ratio is stable, slightly under 102%, in line with higher interest rates. Performance has been spectacular in North America, with a 35 million euro profit, more than double last year. with the combined ratio down 3.5 points to 97.5. Regarding other regions, in other LATAM, almost all units now report in combined ratios below 100%. In EMEA, the combined ratio is also down 6 points from around 120 to 113.6. In conclusion, the technical measures implemented are now clearly playing off. Regarding the live business, premiums are growing 50% thanks to Iberia, as well as strong trends in other Latin, especially Mexico. The live business contributed 130 million to the result. In Iberia, total premiums are up 34%, thanks to the exceptional saving insurance. There was one large corporate policy issued during the quarter, but excluding this special transaction, growth was still around 18% in Iberia, around 8% for the group, on the back of a strong retail business. The protection business is in line with previous trends. The net result was 60 million, which is down year-on-year, mainly due to the lower financial gains. In Brazil, premiums are down around 80% impacted by the currency, as well as the high interest rates, which affect lending and related insurance sales. Profitability continues strong. Regarding the rest of the countries, volumes were up over 11%, led by Odey Latam. Performance in both Mexico and Malta has been noteworthy, growing 38% and 40% respectively. Now, I will hand over to Felipe to discuss the main balance sheet items.