Post on 15-Jul-2015
The Hague, May 21, 2014
Annual General Meeting of Shareholders Aegon N.V.
Jaarlijkse Algemene Vergadering van Aandeelhouders Aegon N.V.
2
Welcome to the Annual General Meeting of Shareholders
Welkom op de jaarlijkse Algemene Vergadering van Aandeelhouders
In order to hear a simultaneous translation into English, please choose channel 2
Voor het beluisteren van een simultaanvertaling in het
Nederlands kiest u kanaal 1
3
Rob Routs
Chairman Supervisory Board
Voorzitter Raad van Commissarissen
4
Opening
Agenda item 1 / Agendapunt 1
5
Presentation on the course of business in 2013
Presentatie over de gang van zaken in 2013
Agenda item 2 / Agendapunt 2
Executing on our strategy
Alex Wynaendts, CEO & Chairman of the Executive Board
The Hague, May 21, 2014
7
Focus on executing our strategy is delivering clear results
2013 Strong performance Higher underlying earnings Strong capital position and ratings Increased dividend
Executing on strategic transformation Getting closer to our customers Expanded digital capabilities Enhanced distribution
8
AA- financial
strength rating
EUR 1.9
billion
Strong underlying earnings before tax
0
140
340
2011 2012 2013
More cash allocated to dividends (EUR millions)
Strong excess capital position
EUR 2.2
billion
Solvency ratio: 212%
All numbers on this slide refer to full year 2013 or end-year 2013 data
9
Aegon’s purpose is to help people take responsibility for their financial future…
…across their life cycle…
10
Building trust and creating benefits in 2013…
Paid out € 20 billion in claims and benefits to our customers…
Impact investments of
€ 3 billion
Invested € 6.3 million in local communities
around the world
11
Global trends support Aegon’s businesses
Aging leads to significant demand for our products globally
Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat
68.6 79.6
51
75.1
71.9 81.7
44.6
76
69.4 83.1
1950
2015
Life expectancy at birth in 1950 and in 2015 (in years; overall: male + female)
12
Executing on our strategic objectives
13
Optimize portfolio Successful repositioning of Spanish business
* Depending on the performance of the partnership, after 5 years an additional amount may be paid
Divestiture of existing joint ventures Strategic partnership with Spain’s largest financial group
Spanish divestments generated over EUR 1 billion
Continued partnership with Liberbank
14
Operational excellence Disciplined focus on cost efficiency supports strategic investments
Cost reductions allow for increased investments without materially increasing total expenses
Cost reduction programs
Consolidation from 13 to 3 divisions in the Americas
Shared service center in the Americas for additional efficiencies
Completed two-year cost reduction program in NL
Extensive transformation program in UK
Restructuring and deleveraging at holding
Strategic investments to respond to our customers’ changing needs
Technology continues to change customer
behavior
Committed to providing products and services customers need
Customers seek different distribution channels ► New online channels to engage customers ► Redesigned intermediary capability
15
Loyal customers Technology continues to change customer behavior
16
Loyal customers Customers are more willing to go online
17 17
Loyal customers Extension of successful UK platform with direct-to-consumer proposition
18
Loyal customers Customers are seeking a wider range of distribution channels
Spain Turkey
India Brazil
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64 67
70
2011 2013 2014
Empower employees
Employee engagement and customer commitment closely linked
63 67
69
2011 2013 2014
Engagement Enablement High performing norm 2014
Financial services norm 2014
73
64
70
65
NB: Both graphs refer to Aegon’s overall 2014 Global Employee Survey results
20
Sustainability is at the heart of our strategy
Capital Talent Expertise Trust Benefits Profits Society
Pricing and product development policy puts customer first
Dow Jones Sustainability Index (DJSI) performance confirms our actions
► Aegon ranked Silver Class in the DJSI – just behind the sector leader
Various key policies established
► Volunteer hours for employees ► Sustainable procurement policy ► Health and safety statement
21
2014
Further executing on our strategy
Aegon well positioned to capture
opportunities
Looking ahead
22
Presentation on the course of business in 2013
Presentatie over de gang van zaken in 2013
Agenda item 2 / Agendapunt 2
23
Annual Report 2013
Jaarverslag 2013
Agenda item 3.1 / Agendapunt 3.1
Financial strategy supports strategic transformation
Darryl Button, CFO & Member of the Executive Board
The Hague, May 21, 2014
25
Aegon performed strongly in 2013
1,544 1,851 1,945
2011 2012 2013
887 1,582
849
2011 2012 2013
2011 2012 2013
3,420 3,177 3,328
2011 2012 2013
* Total sales consist of new life sales, new premiums accident & health, general insurance and 1/10 of gross deposits
Underlying earnings before tax (As reported; EUR million)
Sales MCVNB
Net income (EUR million)
Operating expenses (EUR million)
Sales* and MCVNB (As reported; EUR million)
5,701 6,725 7,151
422
986
Adjusted expense levels
26
Earnings up 5% ► Continued business growth ► Higher equity markets ► Partly offset by weaker US dollar
Lower net income
► Positive: • Higher gains on investments • Lower impairments • Lower tax charges
► Negative: • Losses on equity hedges – in place
to protect capital position • Losses due to adjustments in
market assumptions
Increased underlying earnings not reflected in net income due to hedging costs
1,544 1,851 1,945
2011 2012 2013
887 1,582
849
2011 2012 2013
Underlying earnings before tax (As reported; EUR million)
Net income (EUR million)
27
Strong capital position and cash flows
1.2 1.6
1.3
2011 2012 2013
6.7 7.4 7.4
2011 2012 2013
1.2 2.0 2.2
2011 2012 2013
195% 228% 212%
2011 2012 2013
Operational free cash flows (Excl. market impacts; EUR million)
Return on equity
Solvency ratio (Insurance Group Directive, IGD)
Excess capital at the holding (EUR billion)
28
Local balance sheets well capitalized
Target
Buffer
US UK NL
Floor
New capital management framework
implemented in 2013
US and the Netherlands strongly
capitalized and paying dividends
to the holding
UK capital position significantly
improved after GBP 300 million
contribution from the holding
Capital levels (End of 2013)
29
2013 operational free cash flows in target range of EUR 1.3 - 1.6 billion
Operational free cash flows paid out as dividend to the holding
Americas and the Netherlands expected to remain stable; UK cash flows to increase
New Markets contributing to increasing operational free cash flow going forward
Operational free cash flows: dividends to holding & strengthening of local capital
2013 Americas 0.8 Netherlands 0.3 United Kingdom 0.1 New Markets 0.1 Total normalized operational free cash flow 1.3 Market impacts & one-time items 0.2 Operational free cash flow 1.5
2013 Americas 0.9 Netherlands 0.5 United Kingdom 0.0 New Markets 0.1 Dividend paid by units 1.5
Strong cash flows at the units… (EUR billion)
…translate into dividends to the holding (EUR billion)
30
How excess capital was put to use
Excess capital in 2013 (EUR billion)
2.0 1.5 0.6 (0.5) (0.4) (0.4) (0.4) 2.2
Excess capital January 1, 2013
Net dividends received from business units
Acquisitions & divestments
Investments in business units
Common & preferred dividends
Cancellation of preferred
shares
Funding & operating expenses
Excess capital December 31,
2013
31
Capital management results in ► Lower funding costs ► Improving cash flows ► Increasing return on equity
Leverage ratio and fixed charge coverage on track to reach 2014 objectives
Active capital management improves financial flexibility
8.7
~6.8
34.4%
~30.0%
Q1 13 Q4 13 Q1 14 2014 target
* Interest expense on f inancial leverage and preferred dividends; 2013 restated to reflected earnings impact of DAC and longevity accounting changes ** Gross leverage ratio reflects shareholders’ equity adjusted for DAC and longevity accounting changes
520
~300
3.4x
6-8x
2011 2012 2013 2014 target
Lower funding costs* (EUR million, fixed charge coverage)
Improved gross leverage** (EUR billion, %)
32
0
0.10*
0.21 0.22
2010 2011 2012 2013
Proposed final 2013 dividend of EUR 0.11 per share, total 2013 dividend of EUR 0.22 per share
Continue to offer our investors a choice between cash and shares, with stated intention to neutralize any share dilution
Future dividend growth dependent on strong capital position and cash flows
Payment of growing and sustainable dividend
0 0
140
340
460**
2010 2011 2012 2013 2014E
* Final 2011 dividend of EUR 0.10 per share ** Assumes 2014 interim dividend maintained at EUR 0.11 per share
+ 5%
Dividends per share (EUR per share)
More cash allocated to dividends (EUR per share)
33
Underlying earnings up on higher account balances and lower financing costs at the holding
Higher sales driven by deposit growth and strong accident & health sales in the US
Active capital management further drives down cost of leverage, supports improving RoE
Strong cash flows contributing to solid capital position
Positive momentum continued in first quarter of 2014
* Operational free cash flow excluding market impact and one-time items
€ 498m
+7% vs Q1 13
8.4%
9.1% excluding run-off capital
€ 2.1bn
+20% vs Q1 13
€ 305m
Q1 13
€ 223m
(4)% vs Q1 13
37%
+4% vs Q1 13
Earnings RoE Sales Cash flow* MCVNB Fee
€ 498m
+7% vs Q1 13
8.4%
9.1% excluding run-off business
€ 2.1bn
+20% vs Q1 13
€ 305m
-7% vs Q1 13
€ 223m
-4% vs Q1 13
37%
+4 pp Q1 13
Earnings RoE Sales Cash flow* MCVNB Fee
34
Progress towards 2015 targets
* Excluding market impact and one-time items
€ 498m
Underlying earnings +7% vs Q1 13
€ 498m
Underlying earnings +7% vs Q1 13
€ 498m
Underlying earnings +7% vs Q1 13
€ 498m
Underlying earnings +7% vs Q1 13
30-35%
Fee-based earnings as % of underlying earnings by 2015
€ 1.3-1.6 billion
Annual operational free cash flow* by 2015
7-10%
Grow underlying earnings before tax on average per annum between 2012 and 2015
10-12%
Return on equity by 2015
37%
Q1 2014
€ 305 million
Q1 2014
7%
Q1 2014 vs. Q1 2013
8.4%
Q1 2014 (9.1% excluding run-off capital)
35
Annual Report 2013
Jaarverslag 2013
Agenda item 3.1 / Agendapunt 3.1
36
Remuneration Report 2013
Remuneratierapport 2013
Agenda item 3.2 / Agendapunt 3.2
Remuneration Report 2013
Leo van Wijk, Chairman Compensation Committee
The Hague, May 21, 2014
38
Aegon’s Global Remuneration Framework applies throughout Aegon Group to:
► Provide a consistent and integrated approach to remuneration
► Ensure compliance with European and Dutch regulations for remuneration in financial
institutions
Executive Board Remuneration Policy adopted by the AGM on May 12, 2011
► Executive Board policy already complied with DNB requirements, some refinements
were implemented
► No further changes to Executive Board policy since then
Aegon’s remuneration policy – Executive Board
39
Variable compensation: Based on successful achievement of performance indicators Conditionally granted at the start of the performance year Performance period = 1 year Conditionally allocated (awarded) after completion of the performance year, depending on results 50% of the allocation is in shares, 50% in cash 40% of the allocation is paid out/vests in year following performance year 60% of the allocation is deferred and is paid out/vests in the subsequent 3 years, subject to ex-
post assessments After vesting, the variable compensation shares are subject to a holding period of 3 years
Executive Board remuneration – current outline
Fixed compensation (annual salary) +
Variable compensation (maximum 100% of annual salary) +
Benefits (e.g. pension)
40
Remuneration in 2013 ► Fixed compensation: no change compared to 2012
► Deferred variable compensation from previous years paid out/vested (2010 : shares; 2011 : cash and shares)
► Upfront Variable Compensation regarding performance year 2012 paid out/vested (cash and shares)
► 3 year holding periods apply to all vested shares
Conditional variable compensation allocated over 2013 ► 98,33% of fixed compensation for mr. Wynaendts - 98,50% of fixed compensation for mr. Button
► 40% of the variable compensation related to 2013, is made available in cash and shares in 2014
► The remaining part (60%) of conditional variable compensation over the performance year 2013 (both cash and shares) is to be paid out/vest in future years, subject to ex-post assessments
Executive Board remuneration – 2013
41
Variable compensation measures are based on:
Financial and non-financial targets (75%) ► Underlying earnings after tax (15%) ► Return on equity (15%) ► Market consistent value of new business (20%) ► Return on economic required capital (10%) ► Strategy/sustainability (15%):
− Aegon’s score on the Dow Jones Sustainability Index (7.5%)
− Employee engagement scores (7.5%)
Personal targets (25%) ► Strategy execution – e.g. critical change initiatives like customer centricity ► HR and Sustainability topics– e.g. talent development, succession planning ► Large projects/issues – e.g. balance sheet management, reorganizations
Executive Board remuneration – performance measures & results
100%
100%
93.3% A. Wynaendts 94% D. Button
Outcome 2013:
42
Aegon operates globally, in diverse environments, markets, cultures Opinions, perceptions and appreciation of variable compensation differ Aegon strives for a balance between global consistency and local optimization
New/additional/updated legislation and regulations impact remuneration policies: ► Dutch government proposes to cap variable compensation in financial sector ► Regulations limit sign-on-, retention- and severance payments ► Number of Identified Staff expected to increase on the basis of new criteria ► Crisis-tax over income above EUR 150,000 continues ► Fiscal treatment of pension accrual in the Netherlands to be limited per January 1, 2015
These changes will impact Aegon’s remuneration policies ► In general, for all staff globally ► In particular in the Netherlands ► Including the remuneration for the Executive Board
Aegon’s remuneration policy in general – going forward
43
Annual Report 2013
Jaarverslag 2013
Agenda item 3.1 / Agendapunt 3.1
44
Annual Accounts 2013: Proposal to adopt the Annual Accounts for the year 2013
Jaarrekening 2013: Voorstel tot vaststelling van de Jaarrekening 2013
Agenda item 3.3 / Agendapunt 3.3
45
Prior to the voting: – Insert card with chip facing you – Name appears in display
During the voting: – Voting options appear in display – Press button:
1 = For 2 = Against 3 = Abstain
– Choice appears in display – During voting you can change
your vote – Last choice counts
Vóór de stemming: – Plaats kaart met chip naar voren – Naam verschijnt in venster
Tijdens de stemming: – Stemkeuzes verschijnen in venster – Maak uw keuze:
1 = Vóór 2 = Tegen 3 = Onthouding
– Keuze verschijnt in venster – Tijdens stemming kunt u uw
keuze wijzigen – Laatste keuze geldt
Voting procedure / Stemprocedure
46
Annual Accounts 2013: Proposal to adopt the Annual Accounts for the year 2013
Jaarrekening 2013: Voorstel tot vaststelling van de Jaarrekening 2013
Vote on agenda item 3.3 / Stemming over agendapunt 3.3
47
Proposal to approve the final dividend 2013
Voorstel tot goedkeuring van het slotdividend over het boekjaar 2013
Agenda item 4 / Agendapunt 4
48
Cash flows upstreamed to the holding are available to execute our strategy, to fund operating expenses and to pay dividends to shareholders
Aegon aims to pay a sustainable dividend to shareholders, which can grow over time if performance of the company allows so ► Balance prudence versus offering an attractive dividend
In normal circumstances, Aegon expects to declare an interim dividend
and to propose a final dividend for approval at the AGM
Aegon’s dividend policy
49
Proposed final dividend for 2013: EUR 0.11 per common share
► Results in total dividend for 2013 of EUR 0.22 per common share
To be paid in cash or stock
Value of stock dividend approximately
equal to cash dividend
Aegon’s dividend proposal
0.11
0.11
2012 2013
Dividend (EUR)
0.21 0.22
Final dividend Interim dividend
50
Proposal to approve the final dividend 2013
Voorstel tot goedkeuring van het slotdividend over het boekjaar 2013
Agenda item 4 / Agendapunt 4
51
Proposal to approve the final dividend 2013
Voorstel tot goedkeuring van het slotdividend over het boekjaar 2013
Vote on agenda item 4 / Stemming over agendapunt 4
52
Proposal to release the members of the Executive Board from liability for their duties
Voorstel tot het verlenen van kwijting aan de leden van de Raad van Bestuur
Agenda item 5 / Agendapunt 5
53
Proposal to release the members of the Executive Board from liability for their duties
Voorstel tot het verlenen van kwijting aan de leden van de Raad van Bestuur
Vote on agenda item 5 / Stemming over agendapunt 5
54
Proposal to release the members of the Supervisory Board from liability for their duties
Voorstel tot het verlenen van kwijting aan de leden van de Raad van Commissarissen
Agenda item 6 / Agendapunt 6
55
Proposal to release the members of the Supervisory Board from liability for their duties
Voorstel tot het verlenen van kwijting aan de leden van de Raad van Commissarissen
Vote on agenda item 6 / Stemming over agendapunt 6
56
Proposal to appoint Mr. Robert W. Dineen to the Supervisory Board
Voorstel tot benoeming van de heer Robert W. Dineen als
lid van de Raad van Commissarissen
Agenda item 7 / Agendapunt 7
57
Age: 64 Nationality: American Shares held in the company/Aantal aandelen in de vennootschap: – None Former occupation/vroegere functie: – Vice Chairman of Lincoln Financial Network Memberships other boards/Andere bestuursfuncties – None
Robert W. Dineen
58
“I have always had the highest regard and respect for Aegon, first as a partner during my tenure at Merrill Lynch, and most recently as a competitor while at Lincoln Financial Group.
I trust my many years of experience in the financial services industry will bring great
value to the shareholders, customers, employees and the management team of
Aegon”. Robert W. Dineen
59
Proposal to appoint Mr. Robert W. Dineen to the Supervisory Board
Voorstel tot benoeming van de heer Robert W. Dineen als
lid van de Raad van Commissarissen
Agenda item 7 / Agendapunt 7
60
Proposal to appoint Mr. Robert W. Dineen to the Supervisory Board
Voorstel tot benoeming van de heer Robert W. Dineen als
lid van de Raad van Commissarissen
Voting on agenda item 7 / Stemming over agendapunt 7
61
Proposal to appoint Ms. Corien Wortmann-Kool to the Supervisory Board
Voorstel tot benoeming van mevrouw Corien Wortmann-Kool als lid van de Raad van Commissarissen
Agenda item 8 / Agendapunt 8
62
Age: 54 Nationality: Dutch Shares held in the company/Aantal aandelen in de vennootschap: – None Main occupation/huidige functie – Resigning member of the European Parliament Memberships other boards/Andere bestuursfuncties – Member Supervisory Board Het Kadaster (NL, not listed) – Member Supervisory Board Mercedes-Benz Netherlands
(NL, not listed)
Corien M. Wortmann-Kool
63
“I look forward to helping Aegon achieve a sustainable, innovative and profitable business strategy that earns the trust of both customers
and society. I trust my national and international experience in politics and public administration – including extensive work in Europe – and my knowledge of diverse stakeholder interests will support Aegon in meeting the challenges of a
changing environment”.
Corien M. Wortmann-Kool
64
Proposal to appoint Ms. Corien Wortmann-Kool to the Supervisory Board
Voorstel tot benoeming van mevrouw Corien Wortmann-Kool als lid van de Raad van Commissarissen
Agenda item 8 / Agendapunt 8
65
Proposal to appoint Ms. Corien Wortmann-Kool to the Supervisory Board
Voorstel tot benoeming van mevrouw Corien Wortmann-Kool als lid van de Raad van Commissarissen
Voting on agenda item 8 / Stemming over agendapunt 8
66
Proposal to authorize the Executive Board to issue common shares
Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen
Agenda item 9 / Agendapunt 9
67
Proposal to authorize the Executive Board to issue common shares
Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen
Voting on agenda item 9 / Stemming over agendapunt 9
68
Proposal to authorize the Executive Board to restrict or exclude pre-emptive
rights upon issuing common shares
Voorstel tot machtiging van de Raad van Bestuur tot beperking of uitsluiting van voorkeursrechten
bij de uitgifte van gewone aandelen
Agenda item 10 / Agendapunt 10
69
Proposal to authorize the Executive Board to restrict or exclude pre-emptive
rights upon issuing common shares
Voorstel tot machtiging van de Raad van Bestuur tot beperking of uitsluiting van voorkeursrechten
bij de uitgifte van gewone aandelen
Voting on agenda item 10 / Stemming over agendapunt 10
70
Proposal to authorize the Executive Board to issue common shares under incentive plans
Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in het
kader van incentiveplannen
Agenda item 11 / Agendapunt 11
71
Proposal to authorize the Executive Board to issue common shares under incentive plans
Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in het
kader van incentiveplannen
Voting on agenda item 11 / Stemming over agendapunt 11
72
Proposal to authorize the Executive Board to acquire shares in the company
Voorstel tot machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen
Agenda item 12 / Agendapunt 12
73
Proposal to authorize the Executive Board to acquire shares in the company
Voorstel tot machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen
Voting on agenda item 12 / Stemming over agendapunt 12
74
Any other business
Wat verder ter tafel komt
Agenda item 13 / Agendapunt 13
75
Close of the meeting
Sluiting van de vergadering
Agenda item 14 / Agendapunt 14
76
Thank you – Dank u wel
77 77
Please return your voting device and voting card before departing
Wilt u voor uw vertrek uw stemkastje en stempas inleveren