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Group accounts Q1/2012 and YoY 2011 W&W Group – strong first quarter Dr. Jan Martin Wicke, CFO 14 May 2012.

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Presentation on theme: "Group accounts Q1/2012 and YoY 2011 W&W Group – strong first quarter Dr. Jan Martin Wicke, CFO 14 May 2012."— Presentation transcript:

1 Group accounts Q1/2012 and YoY 2011 W&W Group – strong first quarter Dr. Jan Martin Wicke, CFO 14 May 2012

2 Disclaimer This presentation and the information contained herein, as well as any additional documents and explanations (together the material), are issued by Wüstenrot & Württembergische AG (W&W). This presentation contains certain forward-looking statements and forecasts reflecting W&W managements current views with respect to certain future events. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without limitation, those regarding W&Ws future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where W&W participates or is seeking to participate. The W&W Groups ability to achieve its projected results is dependent on many factors which are outside managements control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions. The following important factors could cause the Groups actual results to differ materially from those projected or implied in any forward-looking statements: – the impact of regulatory decisions and changes in the regulatory environment; – the impact of political and economic developments in Germany and other countries in which the Group operates; – the impact of fluctuations in currency exchange and interest rates; and – the Groups ability to achieve the expected return on the investments and capital expenditures it has made in Germany and in foreign countries. The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward- looking statements as a prediction of actual results. All forward-looking statements included herein are based on information available to W&W as of the date hereof. W&W undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to W&W or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The material is provided to you for informational purposes only, and W&W is not soliciting any action based upon it. The material is not intended as, shall not be construed as and does not constitute, an offer or solicitation for the purchase or sale of any security or other financial instrument or financial service of W&W or of any other entity. Any offer of securities, other financial instruments or financial services would be made pursuant to offering materials to which prospective investors would be referred. Any information contained in the material does not purport to be complete and is subject to the same qualifications and assumptions, and should be considered by investors only in light of the same warnings, lack of assurances and representations and other precautionary matters, as disclosed in the definitive offering materials. The information herein supersedes any prior versions hereof and will be deemed to be superseded by any subsequent versions, including any offering materials. W&W is not obliged to update or periodically review the material. All information in the material is expressed as at the date indicated in the material and is subject to changes at any time without the necessity of prior notice or other publication of such changes to be given. The material is intended for the information of W&W´s institutional clients only. The information contained in the material should not be relied on by any person. In the United Kingdom this communication is being issued only to, and is directed only at, intermediate customers and market counterparties for the purposes of the Financial Services Authoritys Rules ("relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. To the extent that this communication can be interpreted as relating to any investment or investment activity then such investment or activity is available only to relevant persons and will be engaged in only with relevant persons. page 2

3 page 3 Agenda 1.W&W at a glance 2.Financials Q1/2012 results Yearly comparison 2012/ W&W profile

4 Vision The world is changing, at an ever-increasing pace. Given the complexity of today's world, many customers are looking for a reliable, long-term partner to satisfy their needs in terms of financial services. We want to be their partner of choice. Our position in the market is unique: With the two well established strong brands "Wüstenrot" and "Württembergische", the W&W Group is a specialized one-stop shop for financial planning of retail clients and small/medium commercial customers in Germany and the Czech Republic. W&W at a glance page 4 Personal services delivered locally by our mobile sales force of about 6,000 tied agents ensure a customer relationship which is characterized by trust, understanding, and reliability. We offer solutions for each customer's individual needs, throughout all stages in life, in the areas of retail banking with focus on banking products and mortgage lending (B), life and health insurance (L/H) property and casualty insurance (P/C). We deliver clear and systematically defined quality standards. Continuous quality management forms an integral part of our corporate culture. Six million customers rely on our expertise and financial strength.

5 Wüstenrot Bausparkasse AG (BSW) Wüstenrot Bank AG Pfandbriefbank (WBP) Wüstenrot Bausparkasse AG (BSW) Wüstenrot Bank AG Pfandbriefbank (WBP) W&W Group W&W at a glance Structure Württembergische Lebens- versicherung AG ARA Pensions- kasse AG Karlsruher Lebens- versicherung AG Württembergische Kranken- versicherung AG Württembergische Lebens- versicherung AG ARA Pensions- kasse AG Karlsruher Lebens- versicherung AG Württembergische Kranken- versicherung AG Württembergische Versicherung AG Service entities Czech W&W companies Service entities Czech W&W companies Property and Casualty Insurance (P/C) Property and Casualty Insurance (P/C) Others Wüstenrot page 5 Banking Products and Mortgage lending (B) Banking Products and Mortgage lending (B) Life and Health Insurance (L/H) Life and Health Insurance (L/H) W&W Group is based on several strong pillars

6 We stay on track with our efficiency programme W&W 2012 and focus on profitable growth In a challenging economic environment W&W benefits from its solid business model The new efficiency programme "W&W 2015" ensures our further economic independance We stay on track with our efficiency programme W&W 2012 and focus on profitable growth In a challenging economic environment W&W benefits from its solid business model The new efficiency programme "W&W 2015" ensures our further economic independance W&W strategy W&W at a glance Q1/2012 Highlights page 6 Business environment New business Risk assessment Guidance Extremely low domestic interest rates are a challenge for providers of financial services Higher capital requirements Increased consumer protection Extremely low domestic interest rates are a challenge for providers of financial services Higher capital requirements Increased consumer protection Successful new business of W&W in almost all areas Clear increase in new home loan savings business, 9 % above market level L/H shows clear increase in new business New business in P/C growing significantly in vehicle insurance segment Successful new business of W&W in almost all areas Clear increase in new home loan savings business, 9 % above market level L/H shows clear increase in new business New business in P/C growing significantly in vehicle insurance segment PIIGS-exposure further reduced; entire Greek portfolio sold Sound solvability of W&W, equity capital further strengthened W&W is prepared for a further increase in regulation of financial markets PIIGS-exposure further reduced; entire Greek portfolio sold Sound solvability of W&W, equity capital further strengthened W&W is prepared for a further increase in regulation of financial markets In 2012 net profit will rise to 250 mn Sales growth expected in 2012 and 2013 Ongoing period of low interest rates could affect results in the medium term In 2012 net profit will rise to 250 mn Sales growth expected in 2012 and 2013 Ongoing period of low interest rates could affect results in the medium term Earnings W&W exceeds its profit targets: Q1-profit is 66.5 mn against a year to day target of 62.5 mn

7 1828Württembergische founded 1921Wüstenrot established 1999 Merger of Wüstenrot and Württembergische into W&W AG Fulltime employees 6 mn Customers Multi-channel distribution by own sales force of 6,000 tied agents; 5,000 brokers; online-banking; sales cooperations 1828Württembergische founded 1921Wüstenrot established 1999 Merger of Wüstenrot and Württembergische into W&W AG Fulltime employees 6 mn Customers Multi-channel distribution by own sales force of 6,000 tied agents; 5,000 brokers; online-banking; sales cooperations Sound background Number of savings contracts (B) 3.8 mn Mortgage loans (Group) 773,616 Life insurance contracts 2.7 mn P/C insurance contracts 8.0 mn Health insurance customers 470,142 Current accounts(B) 283,000 Call deposit accounts (B) 302,000 Number of savings contracts (B) 3.8 mn Mortgage loans (Group) 773,616 Life insurance contracts 2.7 mn P/C insurance contracts 8.0 mn Health insurance customers 470,142 Current accounts(B) 283,000 Call deposit accounts (B) 302,000 Customer base FY 2011 No 2 in home loan savings No 9 in property/casualty insurance No 12 in life insurance No 2 in home loan savings No 9 in property/casualty insurance No 12 in life insurance Domestic market position W&W at a glance Master data Gross premiums (L/H) 2.4 bn Gross premiums (P/C) 1.4 bn Building society deposits (B) 17.6 bn Volume of building savings contracts (B) bn Mortgage disbursements (B) 4.4 bn Assets under management (Group) 27.9 bn Gross premiums (L/H) 2.4 bn Gross premiums (P/C) 1.4 bn Building society deposits (B) 17.6 bn Volume of building savings contracts (B) bn Mortgage disbursements (B) 4.4 bn Assets under management (Group) 27.9 bn Business volume FY 2011 page 7 As of: 31 December 2011

8 New home loan savings, gross (B) 15.3 bn New home loan savings, net (B) 11.8 bn Total new mortgages (Group) 5.9 bn New premiums (P/C) mn Annual Premium Equivalent (L/H) mn New home loan savings, gross (B) 15.3 bn New home loan savings, net (B) 11.8 bn Total new mortgages (Group) 5.9 bn New premiums (P/C) mn Annual Premium Equivalent (L/H) mn New business Financial result 1.4 bn Premiums earned 3.8 bn Insurance benefits incl. paid claims 3.5 bn Net profit mn Earnings per share 1.94 Financial result 1.4 bn Premiums earned 3.8 bn Insurance benefits incl. paid claims 3.5 bn Net profit mn Earnings per share 1.94 Income statement Total assets 75.4 bn Investments 43.5 bn Retail mortgages 27.4 bn Insurance liabilities 29.7 bn Customer savings 27.0 bn Equity 3.0 bn Total assets 75.4 bn Investments 43.5 bn Retail mortgages 27.4 bn Insurance liabilities 29.7 bn Customer savings 27.0 bn Equity 3.0 bn Balance sheet W&W has set the following profit target: In 2012 net profit will rise to 250 mn W&W has set the following profit target: In 2012 net profit will rise to 250 mn Profit target W&W at a glance Key figures 2011 page 8

9 Solvency ratios Risk profile Ratings * Wüstenrot Holding66.10 % LBBW 8.78 % UniCredito 7.54 % L-Bank 4.99 % Schweizerische Rück 4.67 % Free float 7.92 % Wüstenrot Holding66.10 % LBBW 8.78 % UniCredito 7.54 % L-Bank 4.99 % Schweizerische Rück 4.67 % Free float 7.92 % Shareholders of W&W AG W&W at a glance Key figures 2011 page 9 Distribution of required capital as of 31 December: As of: 31 December 2011 * Ratings as of 20 December For more details concerning W&W ratings see page 34. BBB+ outlook positiveBBB+ outlook stableWürttembergische Lebensversicherung BBB+ outlook positive Württembergische Krankenversicherung BBB+ outlook positiveBBB+ outlook stable Wüstenrot Bank AG Pfandbriefbank BBB+ outlook positiveBBB+ outlook stableWüstenrot Bausparkasse AAA Covered Bonds/Pfandbriefe Wüstenrot Bank FitchS&PIssuer Credit / Default Ratings 337 %192 %Risk-bearing capacity via internal model (VaR 99,5), (solvency/economic capital ratio) 9.5 %10.1 %Total capital ratio (WBP) 11.0 % 9.9 %Total capital ratio (BSW) 246 %236 %Insurance Group 133 %129 %W&W financial conglomerate

10 Business segments Q1/2012 Financials page 10

11 page 11 Agenda 1.W&W at a glance 2.Financials Q1/2012 results Yearly comparison 2012/ W&W profile

12 Building society Life/Health Financials Main figures of the segments Q1/2012 page 12 P/C Banking Q1 2011Q % 2.73 bn 2.69 bnNew home loan savings, net + 3.5% 3.70 bn 3.83 bnNew home loan savings, gross 3M 2011Q % 1.5 bn 1.3 bnTotal new mortgages (W&W group) - 8.4% 987 mn 904 mnNew mortgages Q1 2011Q % 638mn 690 mnGross premiums 76.1 mn mnNew premiums Q1 2011Q % 612 mn 623 mnGross premiums + 6.3% + 5.7% + 9.7% 164 mn 127 mn 32 mn 174 mn 134 mn 35 mn Total new premiums Single premiums Regular premiums %

13 page 13 Agenda 1.W&W at a glance 2.Financials Q1/2012 results Yearly comparison 2011/ W&W profile

14 Business segments yearly comparison 2011/2010 Financials page 14

15 Financials Key figures of the W&W Group (1) 2011/2010, German market Growth in all segments except for life Profit ( mn) exceeds target of 180 mn significantly despite debt crisis in the market Acquisition of Allianz Dresdner strenghtens sales force; integration in line Write down of Greek bonds significantly impact financial result ( 69,9 mn) Positive one-offs in taxes ( 53 mn net profit) Growth in all segments except for life Profit ( mn) exceeds target of 180 mn significantly despite debt crisis in the market Acquisition of Allianz Dresdner strenghtens sales force; integration in line Write down of Greek bonds significantly impact financial result ( 69,9 mn) Positive one-offs in taxes ( 53 mn net profit) Group net profit in mn Comments Home loan savings contracts (B) (vs.103.4) bn Savings (B) 17.6 (vs.17.7) bn Gross premiums (L/H) 2.4 (vs. 2.5) bn Gross premiums (P/C) 1.38 (vs.1.32) bn Assets u. Management (Group) 27.9 (vs. 27.7) bn Home loan savings contracts (B) (vs.103.4) bn Savings (B) 17.6 (vs.17.7) bn Gross premiums (L/H) 2.4 (vs. 2.5) bn Gross premiums (P/C) 1.38 (vs.1.32) bn Assets u. Management (Group) 27.9 (vs. 27.7) bn page 15 Czech companies Due to reduced government premiums on building society contracts, new business declined by 9 % Significant growth in mortgage business. Market share is 4.6 % (vs. 3.6 %) Czech life insurance business decreased by 28 % due to market induced lower single premiums P/C is on previous year level

16 Financials Key figures of W&W Group (2) Improvement of mortgage loan processing Transformation of life business Cost efficiency improvements Value based management of new business Improvement of mortgage loan processing Transformation of life business Cost efficiency improvements Value based management of new business 5 years view page 16 Management priorities Exceeded 2012: tba 250 mn net profit 2011: mn 180 mn net profit Exceeded due to W&W 2009 efficiency programme 2010: mn 140 mn net profit 2008: ROE 2.8 % ROE 9 % Evaluation Net profit Target on previous year basis Achieved Targets ROE 6,7 % 2009: ROE 9.1 % Not achieved due to financial crisis 1 Adjustment of previous year according to IAS 8

17 Financials Key figures banking products and mortgage lending (1) New business growth based on enhanced multi channel distribution Increasing new business for the fifth year in a row New business in mortgages slightly declined due to intensified focus on profitability Net profit declined notably from to 20.8 due to Greek bond impairments ( 64,2 mn loss after tax) and enduring period of low interest rates New business growth based on enhanced multi channel distribution Increasing new business for the fifth year in a row New business in mortgages slightly declined due to intensified focus on profitability Net profit declined notably from to 20.8 due to Greek bond impairments ( 64,2 mn loss after tax) and enduring period of low interest rates New business 2011/2010 Net profit in mn Comments New home loan savings, gross % to 15.3 bn and net % to 11.8 bn New mortgages (B) 3.9 bn (- 6.2 %) New home loan savings, gross % to 15.3 bn and net % to 11.8 bn New mortgages (B) 3.9 bn (- 6.2 %) page 17 * Since 2009, building society and retail banking form one segment banking products and mortgage lending. Previous years are not comparable.

18 Financials Key figures banking products and mortgage lending (2) Improvement of mortgage loan processing Technical integration Allianz Dresdner Bauspar Cost efficiency improvements Value based management of new business Improvement of mortgage loan processing Technical integration Allianz Dresdner Bauspar Cost efficiency improvements Value based management of new business 5 years view Management priorities page 18 Targets 2012: tba Net profit 2012 with mn significantly above level of 2011 In line with forecast due to impairments on Greek bonds 2011: 20.8 mn Net profit clearly below previous year In line with forecast 2010: mn Less net profit due to investments in W&W 2012 Achieved 2009: mn Net profit will rise Achieved2008: 29 mn Net profit in home loan saving will clearly increase Stabilisation of net profit in banking expected * EvaluationNet profit Target on previous year basis * Since 2009, building society and retail banking form one segment banking products and mortgage lending. Previous years are not comparable.

19 Financials Key figures life and health insurance (1) Premium development impacted by significantly reduced single premiums business Product mix changed in line with value targets (significantly higher unit-linked new business) Net profit clearly above target and almost on previous years level despite critical market environment Greek bond impairments impact business segment with 5,7 mn after tax Premium development impacted by significantly reduced single premiums business Product mix changed in line with value targets (significantly higher unit-linked new business) Net profit clearly above target and almost on previous years level despite critical market environment Greek bond impairments impact business segment with 5,7 mn after tax New business 2011/2010 Net profit in mn Comments Total new premiums (L/H) mn ( %) Single premiums mn ( %) Regular premiums mn (+ 8.3 %) New business (Health only) 17.5 mn (+ 6.1 %) APE (L/H) 240 mn (+ 0.8 %) Total new premiums (L/H) mn ( %) Single premiums mn ( %) Regular premiums mn (+ 8.3 %) New business (Health only) 17.5 mn (+ 6.1 %) APE (L/H) 240 mn (+ 0.8 %) page 19

20 Financials Key figures life and health insurance (2) Transformation strategy for life business Value based management of new business Cost efficiency improvements Transformation strategy for life business Value based management of new business Cost efficiency improvements 5 years view page 20 Management priorities Targets 2012: tba Net profit 2012 at 2011-level: 30 mn to 40 mn 2011: 40.2 mn Net profit 2011: 29 mn Achieved 2010: 40.6 mn Net profit above level of 2009 Achieved 2009: 16.7 mnHigher net profit vs. previous year 2008: 13.4 mn Clear improvement of revenues as to 2007: 18.8 mn EvaluationNet profit Target on previous year basis Not achieved due to decline in financial result Exceeded

21 Financials Key figures property and casualty insurance (1) New business and premium development clearly above market. Growth particularly in motor and SME-lines Significantly higher profit due to improved technical result (combined ratio in local business 92,7 %) No Greek bonds in portfolio of P&C segment New business and premium development clearly above market. Growth particularly in motor and SME-lines Significantly higher profit due to improved technical result (combined ratio in local business 92,7 %) No Greek bonds in portfolio of P&C segment Selected data 2011/2010 Net profit in mn Comments New premiums mn (+ 5.7 %) Total gross premiums 1.4 bn (+ 4.2 %) Gross premiums motor segment mn (+ 7.2 %) Corporate clients mn (+ 5.2 %) New premiums mn (+ 5.7 %) Total gross premiums 1.4 bn (+ 4.2 %) Gross premiums motor segment mn (+ 7.2 %) Corporate clients mn (+ 5.2 %) page 21

22 Financials Key figures property and casualty insurance (2) Underwriting disciplin to be continued Multi-channel distribution offers growth opportunities Cost management Underwriting disciplin to be continued Multi-channel distribution offers growth opportunities Cost management page 22 Management priorities 2011/2012 Targets 5 years view Achieved Evaluation 2012: Net profit will be 80 to 90 mn 2011: mn Net profit above level of : 26.4 mn Less net profit due to investments in W&W 2012 efficiency programme 2009: 81.8 mn Higher net profit vs. previous year 2008: 16.1 mn Higher net profit vs. previous year Net profit Target on previous year basis Achieved 2012: tba

23 Balance sheet 2011/2010 Financials page 23

24 Balance sheet details (W&W Group) Assets Equity and Liabilities page 24 Financials Assets are dominated by investments and retail mortgages; Liabilities are dominated by insurance liabilities and liabilities to customers. Over all business segments W&W Group has a comfortable liquidity position.

25 Solvency ratios page 25 Financials Sound capitalization of W&W Group

26 Investments Investments of the W&W Group as of 31 December 2011 amount to 43.5 (vs 44.3) bn page 26 Financials As a matter of principle, the Group monitors all exposures continuously

27 PIIGS-Exposure of the W&W Group Financials page 27 Exposure in PIIGS-countries has been further reduced No more Greek bonds in stock

28 PIIGS-Exposure of the W&W Group Financials page 28

29 page 29 Agenda 1.W&W at a glance 2.Financials Q1/2012 results Year on year 2011/ W&W profile

30 A short history of W&W Profile page Established in 1828, Württembergische Privat- Feuer-Versicherungsgesellschaft is the first private property insurance in southern Germany Established in 1921, Wüstenrot is Germanys first home loan and savings bank 1999 Merger of Wüstenrot and Württembergische into W&W AG 2006 Start of fundamental restructuring of the Group and launch of "W&W 2009" modernization programme, followed by "W&W 2012" efficiency programme aiming at net profit of 250 mn in Acquisition of Allianz Dresdner Bauspar AG 2009Acquisition of Vereinsbank Victoria Bauspar AG 2005Acquisition of Karlsruher Versicherungsgruppe 2001 Merger of Wüstenrot and Leonberger Bausparkasse AG In 1833 Allgemeine Rentenanstalt, the first pension insurance in Germany, was established 1991Cooperation of Allgemeine Rentenanstalt and WürttFeuer; names change to Württembergische Versicherung AG and Württembergische Lebensversicherung AG

31 Multi-channel distribution 1) Direct sales, supporting the mobile sales force through mailshots, call centres, online transactions Profile MobSF Württ MobSF Würo Brokers Banks / coop. partners Direct 1 Other ~ Potential access to 40 million customers Partnerships and cooperations Banks Insurance companies Financial sales networks Brokers 5,000 brokers Cooperations page 31

32 Cross Selling potential of W&W Seite % 10% Status quo 2010: 10% are customers of both segments (acquired by own salesforce) Banking products and home financing Insurance Division Target: 15% are customers of both segments (acquired by own salesforce) Insurance Division Target: Up 15 % = customers in % Profile Banking products and home financing

33 page 33 Market shares Profile Banking Products and Home Financing 1. Schwäbisch Hall28.3 % 2. Wüstenrot 13.7 % 3. BHW11.6 % Wüstenrot Bausparkasse AG (BSW) Insurance Division New home loan savings business (gross) 2011 (private sector) Wüstenrot Bank2.9 % Wüstenrot Bank AG Pfandbriefbank (WBP) New home financing business Allianz15.0 % 2.AXA 5.3 % Württembergische Versicherung 2.3 % Württembergische Versicherung AG Gross premiums 2010 * 1.Allianz Leben17.4 % 2.R&V 5.4 % Württembergische Lebensvers. 2.5 % Württembergische Lebens- versicherung AG Gross premiums 2011 Market share * 2011 data will be published by Juli 2012

34 Ratings Profile page 34 In addition, Wüstenrot Bausparkasse AG is rated "A", outlook: stable by GBB-Rating Gesellschaft für Bonitätsbeurteilung mbH Württembergische Lebensversicherung AG Württembergische Krankenversicherung AG Wüstenrot Bausparkasse AG Wüstenrot & Württembergische AG Württembergische Versicherung AG Wüstenrot Bank AG Pfandbriefbank Covered Bonds / Pfandbriefe (B) Hybrid capital bond (P/C) Hybrid capital bond (L) Standard & PoorsFitchRatings BBB+ outlook positive BBB+ outlook positive BBB+ outlook positive BBB+ outlook positive Issuer Default Rating BBB+ outlook positive BBB+ outlook positive AAA A- outlook positive BBB+ outlook stable BBB+ outlook stable A- outlook positive BBB+ outlook stable BBB outlook stable BBB outlook stable Financial Strength Rating Issuer Credit Rating Financial Strength Rating BBB+ outlook stable A- outlook positive BBB+ outlook stable BBB+ outlook stable Hybrid capital bond : BBB- * Ratings as of 20 December 2011.

35 Shareholder structure of W&W AG Issued capital of W&W AG is 481,067, It is divided into 91,992,622 no-par value shares. Pro-rata issued capital per share amounts to 5.23 All W&W shares are registered shares. Profile page 35 % of issued capital Shareholders national/international 6% 94% 97% 3% PrivateInstitutional

36 Investor Relations Wüstenrot & Württembergische AG Gutenbergstraße Stuttgart Investor Relations, Ute Jenschur internet: ww-ag.com/go/investor-relations (in German) phone: page 36 Profile


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