PARIS, March 4 /PRNewswire-FirstCall/ -- - A Very Robust Set of Results For CNP Assurances in 2007 - Attributable Recurring Profit Before Capital Gains Up 35% (Up 20%Like-For-Like)
- Value of New Business Up 18% (Up 1% Like-For-Like) - Dividend Recommended: EUR2.85 per share, Up 24% - Outlook for 2008: Double-Digit Growth in Attributable Recurring Profit Summary CNP Assurances is releasing today its 2007 balance sheet and results,which reflect the acquisition of an additional 50% interest in EcureuilVie. Amid unsettled credit markets hit by US subprime woes in the secondhalf of the year, CNP turned in a very robust performance despite adownturn in the French life insurance business. The subprime crisis hadonly a very limited impact on CNP Assurances, which delivered 20%like-for-like growth in attributable recurring profit before capital gainson the back of a continuing rise in technical reserves, which representmore than 80% of revenue. Profit attributable to equity holders of theparent came in 7% higher. European embedded value before dividends rose 14%year-on-year to EUR77.8 per share at 31 December 2007. The value of newbusiness surged 18% on a reported basis and 1% like-for-like (comparablescope of consolidation and constant exchange rates), to EUR355 million. Key figures - Insurance and financial liabilities at 31 December 2007: EUR244.2billion, up 6.3% on a reported basis and 8.3% excluding deferredparticipation. - Consolidated premium income: EUR31,529.5 million, down 1.4% on areported basis(1) and 1.9% like-for-like. - EBIT: EUR1,837 million, up 21% on a reported basis and 19.6%like-for-like.(1) - Recurring profit before capital gains: EUR1,120 million, up 34.8% ona reported basis and 20% like-for-like. - Profit attributable to equity holders of the parent: EUR1,222million, up 6.7%. - European embedded value per share before dividends: EUR77.8, up 11%compared with EEV at 31 December 2006, calculated based on CFO Forumprinciples; up 14% compared with EEV at 31 December 2006, calculated afterdividends, share issues and the acquisition of an additional 50% interestin Ecureuil Vie (EUR68). - Estimated value of new business: EUR355 million, up 18% on a reportedbasis and 1% like-for-like. I. Insurance & financial liabilities and revenue At 31 December 2007, insurance and financial liabilities totalledEUR235.5 billion excluding deferred participation on fair valueadjustments, an increase of 8.3% compared with year-end 2006 and 9% onaverage over the period. Including the deferred participation reserve, which fell to EUR8.7billion at 31 December 2007 from EUR12.1 billion at end-December 2006 duemainly to the year-on-year rise in interest rates, total insurance andfinancial liabilities came to EUR244.2 billion. As announced in the 7 February 2008 press release, consolidated premiumincome for 2007 totalled EUR31,529.5 million, down 1.4% from the previousyear on a reported basis and 1.9% like-for-like. Like-for-like figuresexclude the contribution of Spanish subsidiary CNP Vida, which wasconsolidated from 5 April 2007. II. Impact of the summer 2007 financial crisis In August and November 2007, CNP published details of its asset-backedsecurities (ABS) exposure. CNP has no direct exposure to US subprimemortgages and its indirect exposure is a very low EUR10 million. Its totalexposure to asset-backed securities at 31 December 2007 remained stable atEUR5.6 billion. As with all portfolios, asset-backed securities were analysed in depthand valued using the appropriate methods during the preparation of theCompany's financial statements. Overall, there were only limited changes in the fair value ofasset-backed securities due to the high quality of the portfolios and anabsence of default on the underlying assets. Changes in fair valuerepresented a negative impact of EUR47 million before taxes, of which EUR41million was dealt with through profit or loss and EUR6 million throughequity. The Audit Committee welcomed the information provided by ExecutiveManagement regarding the very limited impact of the financial crisis on CNPAssurances' accounts. III. Results As in the first half of the year, the acquisition of an additional 50%interest in Ecureuil Vie, finalized on 20 February 2007, had a significantimpact on attributable recurring profit and profit attributable to equityholders of the parent, by eliminating minority interests in thissubsidiary. 1) EBIT EBIT surged 21% to EUR1,837 million, including like-for-like growth of20%. This reflects robust growth in technical reserves, which advancednearly 9% over the period and generated more than 80% of Group revenue in2007. EBIT growth was powered by the Pensions business in Brazil and thePersonal Risk business (health, personal risk, loan and property & casualtyinsurance) in France and Italy. The Savings business contributed EUR1,090 million (up 16%) to totalEBIT, the Pensions business EUR158 million (up 21%) and the Personal Riskbusiness EUR529 million (up 28%). International subsidiaries contributed EUR439 million, or 24% of totalEBIT, up 22% year-on-year. 2) Impact of changes in financial markets on 2007 earnings Based on total assets of EUR262 billion, year-on-year changes in thefinancial markets, and in particular the rise in interest rates, had alimited impact on earnings. Net impairment losses had a negative EUR67million impact on attributable recurring profit, more than offset byrealised capital gains of EUR125 million on the corresponding portfolio. Asshown in the table below, capital gains on equities and investment propertyresult in a positive impact of EUR58 million on attributable recurringprofit net of impairment losses. Fair value adjustments to tradingsecurities had a positive net impact of EUR44 million on profitattributable to equity holders of the parent.
Attributable recurring profit before capital gains EUR 1,120 million Capital gains on equities and investment property, net of impairment EUR 58 million Attributable recurring profit EUR 1,178 million Fair value adjustments to trading securities EUR 44 million Profit attributable to equity holders of the parent EUR 1,222 million 3) Attributable recurring profit (before and after capital gains) andprofit attributable to equity holders of the parent Overall, attributable recurring profit before capital gains on equitiesand investment property came in at EUR1,120 million, up 34.8% on a reportedbasis and 20% like-for-like. Profit attributable to equity holders of theparent came in 6.7% higher on a reported basis, at EUR1,222 million. IV. Embedded value CNP Assurances publishes its embedded value according to the principlesrecommended by the CFO Forum, of which it is a member. At 31 December 2007,its European embedded value stood at EUR11,553 million, or EUR77.8 pershare (before dividends and after the cost of solvency capital andnon-financial risks, an increase of 14% over the year-earlier figure(EUR10,104 million, or EUR68 per share after dividends, share issues andthe acquisition of an additional 50% interest in Ecureuil Vie). At year-end2007, ANAV came to EUR58.7 per share before dividends and in-force businessamounted to EUR19.1 per share. The value of new business came to EUR355 million, or EUR2.4 per share,up 18% over 2006 and 1% excluding the acquisition of an additional 50%interest in Ecureuil Vie. V. Solvency capital The solvency capital requirement after dividends at 31 December 2007was covered 2.39 times in total and 1.17 times before taking into accountunrealised capital gains. There were no subordinated debt issues in 2007. VI. Earnings per share and dividends Earnings per share based on attributable recurring profit came in atEUR7.95. At the Annual General Meeting on 22 April 2008, the ExecutiveBoard will recommend increasing the dividend by 24% year-on-year to EUR2.85per share. In light of the deadlines imposed by Euroclear, the newsettlement system, the dividend will be paid as from 29 April 2008. VII. Targets and outlook for 2008 Unless the financial crisis worsens considerably, we expect a rise intechnical reserves to power double-digit growth in the Group's recurringprofit in 2008, despite a possible decline in the French market. This press release, the consolidated financial statements, thenarrative report(2) and the report on embedded value are available forconsultation in French and English on the CNP Assurances website,
--------------------------------- (1) Comparable scope of consolidation: - Premium income: excluding CNP Vida (Spain). - Profit: excluding CNP Vida and 50% of Ecureuil Vie. (2) Auditors' review in progress. --------------------------------- Appendix 1 IFRS (in EURm) 31 Dec. 31 Dec. 31 Dec. Actual Pro forma 2007 2007 2006(3) change change (2) Pro forma (2) EBIT (1) 1,837 1,815 1,518 +21.0% + 19.6% - Finance costs and share of profit of associates (60) (61) (59) - +3.0% - Income tax expense (499) (493) (388) - +27.2% - Minority interests (157) (264) (240) - +9.9% Attributable recurring profit before capital gains 1,120 997 831(3) +34.8% +20.0% Net capital gains on equities and investment property 58 74 71 - +3.8% Attributable recurring profit 1,178 1,071 902(3) +30.6% +18.7% Fair value adjustments to trading securities 44 37 104 - -64% Exceptional items - - 139 - - Profit attributable to equity holders of the parent 1,222 1,109 1,145 +6.7% NM (1) Gross operating profit (EBIT) corresponds to net insurance revenueless expenses, i.e. operating profit before fair value adjustments, capitalgains on equities and investment property held in proprietary portfoliosand exceptional items. (2) Pro forma 2007 profit attributable to equity holders of the parentis based on a comparable scope of consolidation and constant exchangerates. (3) After measures to reduce earnings volatility. (4) Reported data at 31 December 2006 before measures to reduceearnings volatility: - EBIT: EUR1,594 million - Attributable recurring profit before capitalgains: EUR862 million - Attributable recurring profit: EUR948 million -Profit attributable to equity holders of the parent: EUR1,145 million.
European embedded value In EUR per share (1) (1) (2) (3) (1)/(3) 31 Dec. 31 Dec. 31 Dec. 31 Dec. % change 2007 2007 2006 2006 before before Pro forma(i) Reported dividends dividends after before (EURm) dividends dividends ANAV before dividends 8,713 58.7 50.5 54.0 +16% In-force business 2,840 19.1 17.5 15.9 European embedded value per share and cost of solvency capital and non-financial risks 11,553 77.8 68.0 69.8 +14% (i) Pro forma: after share issue and acquisition of an additional 50%interest in Ecureuil Vie.
Embedded value calculated at: - 31 December 2007, on the basis of 148,537,823 shares. - 31 December 2006, on the basis of 138,635,302 shares. Value of new business Total Group 31 Dec. 2007 31 Dec. 2006 31 Dec. 2006 100% Ecureuil Vie 50% Ecureuil Vie In EURm 355 352 300 In EUR/share 2.4 2.4 2.2 Disclaimer Some of the statements contained in this press release may beforward-looking statements referring to projections, future events, trendsor objectives which, by their very nature, involve inherent risks anduncertainties. Actual results could differ materially from those currentlyanticipated in such statements by reason of factors such as changes ingeneral economic conditions and conditions in the financial markets, legalor regulatory decisions or changes, changes in the frequency and amount ofinsured claims, particularly as a result of changes in mortality andmorbidity rates, changes in surrender rates, interest rates, foreignexchange rates, the competitive environment, the policies of foreigncentral banks or governments, legal proceedings, the effects ofacquisitions and the integration of newly-acquired businesses, and generalfactors affecting competition. Further information regarding factors which may cause results to differmaterially from those projected in forward looking statements is includedin CNP Assurances' filings with the Autorite des Marches Financiers. CNPAssurances does not undertake to update any forward-looking statementspresented herein to take into account any new information, future event orother factors. The English language version of this press release is a freetranslation from the original, which was prepared in French. All possiblecare has been taken to ensure that the translation is an accuraterepresentation of the original. However, in all matters of interpretationof information, views or opinions expressed therein, the original languageversion of the press release in French takes precedence over thetranslation.
Press Relations: Sophie Messager, +33-1-42-18-86-51, E-mail:
CNP Assurances - 2007 Results
March 05, 2008, 10:27 p.m. EST 10 Min Read
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