“2007 was another year of solid performance, with underlying earnings per share growth outpacing our Ambition 2012 target” said Henri de Castries, Chairman of AXA’s Management Board.
“The reported numbers reflect the combination of a strong organic growth in all our business lines, the successful integration of
“In the context of a less favorable macroeconomic environment since the beginning of the year, AXA should achieve positive revenue and underlying earnings growth in 2008.”
Underlying earnings were up 27% on a reported basis to Euro 4.96 bln, or up 15% on a comparable basis, reflecting solid growth in all segments (+10% in Life & Savings, +8% in Property & Casualty and +21% in Asset Management).
Adjusted earnings reached Euro 6.138 bln, up 22% on a reported basis, or up 14% on a comparable basis, as a result of higher underlying earnings and Euro 1.175 bln net capital gains, in line with last year.
Net income was up 11% on a reported basis to Euro 5.66 bln, or up 7% on a comparable basis, mainly as a result of higher adjusted earnings, negative impact from the change in fair value of financial assets (under fair value option) and derivatives, positive impact from the sale of the Dutch operations and Winterthur integration costs.
Underlying earnings per share, net of interest charges on perpetual subordinated debt, increased by 16% to Euro 2.27, outpacing Ambition 2012 targets.
Dividend per share of Euro 1.20, up 13% in line with adjusted earnings per share, will be proposed at AXA’s annual shareholders’ meeting on April 22, 2008. The dividend will be payable on April 29 with an ex-dividend date of April 24.
Shareholders’ equity was Euro 45.6 bln, down Euro 1.6 bln notably due to a lower level of unrealized capital gains and to the share buyback program.
Assets under management amounted to Euro 1,281 bln, notably fuelled by 42 bln of unit linked and third party asset management net inflows.
Asset Backed Securities (ABS) mark-to-market impact amounted to Euro -0.6 bln, net of policyholders participation and tax3, of which Euro -0.3 bln was in the P&L and Euro -0.3 bln was in OCI4.
OUTLOOK 2008
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2008 has started in a less favorable environment with very volatile and bearish equity markets, a continuation of the liquidity crisis, concerns about a slowdown in world economic growth, lower interest rates and high credit spreads.
In this environment and assuming equity markets stabilize at current levels, AXA should achieve positive revenue and underlying earnings growth in 2008.
In the Life & Savings segment (50% of earnings), AXA should continue to benefit from positive cash-flows as both our general account products and unit linked products with secondary guarantees are well-suited for customers in the current environment.
Property & Casualty and International business (39% of earnings) should continue to benefit from strong and growing market positions as well as from a gradual positive turn of the cycle in some of AXA’s markets.
Asset Management (11% of earnings) mix of assets, tight expense management and long term track record should partly offset the negative impact from equity markets.
