The value of the day in Europe Aegon: disappointing results and outlook

(AOF) – Aegon ranks dead last in the AEX index on the Amsterdam stock exchange, with a fall of nearly 6% to 5.03 euros per share. The Dutch insurer suffered from the publication this morning of a solvency ratio and a generation of operating capital below market expectations in the last quarter of 2021. The first, which stood at 211% (+15 percentage points) for a consensus of 116%, was penalized by one-off items, including profit sharing in the Netherlands and measures to reduce mortality risk in the United States.

The generation of operating capital fell by 36% year-on-year, to 243 million euros, and came out 21% below the consensus reported by UBS, partly a victim of one-off exceptional items such as higher. Apart from these exceptional items, Aegon would have missed the consensus by about 10%, estimates the Swiss bank.

In addition, operating income fell by 2% to 470 million euros, even if it remained 3% above expectations. This is mainly due to the good performance and growth of the international segment (+50% compared to consensus) and the Netherlands (+7%), partially offset by the shortfall in the United States (-9% compared to the consensus). The Covid morbidity and mortality impacts have been in line with forecasts, says UBS.

For its part, net income group share almost doubled (+93%) to 504 million.

Finally, Aegon also disappointed with its forecasts. The insurer is indeed targeting a generation of operating capital of 1.2 and 1.3 billion euros in 2022 and 2023, while the market expects 1.5 to 1.6 billion. The cumulative FCF forecasts of 1.4 to 1.6 billion euros over the period of the plan are otherwise unchanged (consensus at 1.8 billion euros).

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