Business Wire 14-Feb-2019 1:00 AM
Aegon has set new medium-term financial targets with a focus on growing capital generation and dividends. By safeguarding a strong capital position, Aegon will continue to help millions of people to achieve a lifetime of financial security.
For the years 2019-2021, Aegon aims to achieve the following Group financial targets:
For 2019, Aegon expects its units to upstream EUR 1.5 billion in dividends to the holding, including divestment proceeds. This confirms the fungibility of the capital generated and supports a sustainable return to shareholders.
The current capital framework and related target ranges remain unchanged for the years 2019-2021:
As of the second half of 2018, Aegon is applying an adjusted capitalization definition. To align closer to definitions used by peers and rating agencies, Aegon has retrospectively changed its internal definition of adjusted shareholders' equity used in calculating return on equity for the group, return on capital for its units, and the gross financial leverage ratio. Shareholders' equity will no longer be adjusted for the remeasurement of defined benefit plans. As a result, the gross financial leverage ratio increases by 2.2%-point compared with the old definition. This means that maintaining a 26-30% gross financial leverage ratio effectively implies a more conservative target.
Statement of Alex Wynaendts, CEO
"The new set of financial targets we have announced today is building on the successes we have achieved during the previous three-year target period. Going forward, our focus remains on strong capital generation and providing shareholders with attractive returns.
"Our capital generation is backed by a proactive approach to managing our portfolio of businesses, which we have now grouped into three distinct categories – "Manage for Value", "Drive for Growth", and "Scale up for Future" businesses. The first category consists of at-scale businesses, which are mostly spread-based, and we manage these for value in a sustainable way. The vast majority of our investments will be directed to "drive for growth" businesses which are at the core of our strategy as they drive future capital generation. Finally, the third part of our portfolio – "Scale up for Future businesses" – is aiming at capturing meaningful new opportunities.
"This approach allows us to grow profitably, and to create value for all our stakeholders including our customers and shareholders. In this way, we will fulfill our purpose to help people achieve a lifetime of financial security."
1) Assuming markets move in line with management's best estimate, no material regulatory changes and no material one-time items other than already announced restructuring programs
Aegon's roots go back almost 200 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 20 countries in the Americas, Europe and Asia. Today, Aegon is one of the world's leading financial services organizations, providing life insurance, pensions and asset management. Aegon's purpose is to help people achieve a lifetime of financial security. More information on aegon.com.
Cautionary note regarding non-IFRS-EU measures
This document includes the following non-IFRS-EU financial measures: underlying earnings before tax, income tax, income before tax, market consistent value of new business and return on equity. These non-IFRS-EU measures are calculated by consolidating on a proportionate basis Aegon's joint ventures and associated companies. Market consistent value of new business is not based on IFRS-EU, which are used to report Aegon's primary financial statements and should not be viewed as a substitute for IFRS-EU financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Return on equity is a ratio using a non-IFRS-EU measure and is calculated by dividing the net underlying earnings after cost of leverage by the average shareholders' equity adjusted for the revaluation reserve. Aegon believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide meaningful supplemental information about the underlying operating results of Aegon's business including insight into the financial measures that senior management uses in managing the business.
Local currencies and constant currency exchange rates
This document contains certain information about Aegon's results, financial condition and revenue generating investments presented in USD for the Americas and Asia, and in GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about Aegon presented in EUR, which is the currency of Aegon's primary financial statements.
The statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, could, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:
This press release contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (596/2014). Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.