9M results 2009

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Information about 9M results 2009
Finance

Published on March 12, 2014

Author: Ageas

Source: slideshare.net

9M 2009 trading update 17 November 2009

FORTIS I Highlights 9M 09 I page 2 Inflow Net profit Operational performance Capital position      YTD 09 EUR 11.4 bn, Q3 09 EUR 3.5 bn (incl. YTD EUR 2.8 bn from non-consolidated joint ventures, Q3 09 EUR 0.9 bn)  In line with YTD 08; + 1% vs Q3 08 – AG Insurance: EUR 5.1 bn, +3% vs YTD 08. +6% vs Q3 08 thanks to a better performance in Life and Non-Life – International: EUR 6.3 bn, -2% vs YTD 08; -3% vs Q3 08; Asia +21% YTD  Group YTD net profit after minority interests of EUR 1,082 mio, Q3 net profit of EUR 196 mio – Insurance: EUR 371 mio incl. EUR 94 mio DRD tax recovery and EUR 50 mio net negative impact on investment portfolio; Q3 net profit of EUR 143 mio – General: EUR 711 mio; Q3 net profit of EUR 53 mio includes EUR 83 mio positive result on value call option BNP Paribas and no change in value of RPN(I) and RPI  Combined ratio YTD of 103.3% in Belgium and 104.5% in International  Improvement vs H1 09 mainly triggered by fewer large claims in both segments  Capital position remained solid; total solvency ratio at 232%  Core equity at EUR 8.5 bn, EUR 5.8 bn above minimum requirement 17/11/2009 I page 2

FORTIS I 17/11/2009 I page 3 Strategic review announced end of Q3; execution has started 06/10/2009: Luxemburg Fortis announces sale of Non- Life activities to La Bâloise 09/11/2009: Thailand Kasikorn Bank will increase stake in Muang Thai Group Holding to 51%, strenghtening ties with Joint Venture. Fortis’ Economic interest in Life Insurance resp. Non-Life Insurance goes down to 31% and 12%. Net proceeds to be received by Fortis of EUR 41 million cash vs a total investment from 2004 til 2008 of EUR 63 million 28/10/2009: Russia Fortis announces decision to discontinue insurance operation in Russia 11/09/2009: UK Tesco Personal Finance & Fortis UK conclude partnership discussions on providing motor & household insurance 17/09/2009: Italy Acquisition of 50%+1 share in UBI Assicurazioni, one of the leading Non-Life bancassurance players, by Fortis and BNP Paribas Assurance 25/09/2009 Investor Day: publication conclusions strategic review

FORTIS I I page 4 Commercial performance remains solid in Q3 09 17/11/2009 I page 4 Total gross inflow (EUR bn) Belgium Life Non-Life International* Life Non-Life Total inflow* Of which non-consolidated jv’s Life Non-Life Net result insurance after minorities Belgium (EUR mio) International (EUR mio) YTD 09 5.1 3.9 1.2 6.3 5.1 1.2 11.4 2.8 2.5 0.3 371 301 70 YTD 08 4.9 3.8 1.1 6.4 5.2 1.2 11.3 2.3 2.1 0.2 8 (32) 40 Change 3% 3% 4% (2%) (1%) (5%) 0% 22% 23% 16% * * 70% Q3 09 1.6 1.2 0.4 2.0 1.6 0.4 3.5 0.9 0.8 0.1 143 106 37 Q3 08 1.5 1.1 0.4 2.0 1.6 0.4 3.5 0.8 0.7 0.1 (313) (281) (30) Change 6% 7% 3% (3%) (2%) (9%) 1% 13% 13% 8% * * * * including non-consolidated joint ventures at 100%

FORTIS I I page 5 Inflow by region 17/11/2009 I page 5 (EUR mio) Fully consolidated entities Belgium United Kingdom Other European countries Portugal France Luxemburg Ukraine Germany Turkey Asia Hong Kong Equity associates at 100% Malaysia Thailand China India Fortis Re-Insurance Total % Ownership 75%-1 100% 51% 100% 50% / 100% 100% 100% 100% 100% 31% 40% / 15% 25% 26% 100% YTD 09 3,925 6 2,375 1,652 231 416 2 24 50 2,754 215 2,539 394 340 1,754 51 9,060 YTD 08 3,799 2,920 1,628 347 861 3 19 62 2,374 204 2,071 338 259 1,454 19 8,993 Q3 09 1,173 3 727 482 78 143 1 8 15 845 74 771 1120 108 525 18 2,754 YTD 09 1,173 696 182 163 19 297 297 230 67 2,348 YTD 08 1,127 744 165 146 19 257 257 208 49 70 2,363 Q3 09 365 247 54 50 4 83 83 60 23 749 YTD 09 5,098 702 2,557 1,815 231 435 2 24 50 3,051 215 2,835 624 407 1,754 51 11,408 YTD 08 4,926 744 3,085 1,774 347 880 3 18 62 2,531 204 2,327 546 308 1,454 19 70 11,356 Q3 09 1,544 250 781 532 78 147 1 8 15 928 74 854 180 131 525 18 3,503 Gross inflow Life Gross Written premiums Non-Life Total

FORTIS I I page 6 AG Insurance Inflow (EUR bn) Net Profit before minorities (EUR mio) 17/11/2009 I page 6 3.0 3.1 0.8 0.8 1.1 1.2 YTD 08 YTD 09 Non-Life GWP 4.9 5.1 -75.8 297.0 47.4 50.0 YTD 08 YTD 09 Non-Life +3% -28.4 347.0 Group Life Individual Life Life Total  Q3 09 net profit before minorities EUR 141 mio, including EUR 32 mio net positive impact on investment portfolio  Minority interests: YTD 09 EUR 46 mio, Q3 EUR 35 mio Life  Q3 09 net profit before minorities EUR 114 mio  Funds under management EUR 44.7 bn, +7% vs end 08 Non-Life  Q3 09 net profit before minorities EUR 27 mio  Combined ratio YTD of 103.3%, lower than H1 09 mainly due to an improved claims ratio (62.5%) Individual Life  Bank Channel up 19% to EUR 2.6 bn  Broker channel at EUR 0.5 bn; Continued general market decline in Life Non-Life  Continued strong sales via broker channel to SME business (+7%); Inflow bank channel remained stable  Successful implementation VIP Modulis  

FORTIS I I page 7 Fortis Insurance International Inflow (incl. joint ventures at 100%) (EUR bn) 17/11/2009 I page 7 Life  Inflow Non-consolidated jv’s at 100% YTD EUR 2.5 bn, +23% thanks to strong performance Asian operations and favourable currency rate movements  Mixed performance in Europe: Portugal higher (+2% YTD) vs continued low inflows in France & Luxemburg Non-Life  Inflow down 5% YTD due to adverse currency rate evolution in the UK (YTD +7% at constant rates)  Slowdown in Malaysia in Q3 due to seasonality Net Profit after minorities (EUR mio) 1.2 1.2 5.15.2 YTD 08 YTD 09 6.4 6.3(2%) Non-Life GWP Life 34.0 -18.0 36.0 59.0 YTD 08 YTD 09 41.0 70.0 +70% Non-Life Life   Total  Q3 09 net profit after minorities EUR 37 mio  Minority interests: YTD 09 EUR 37 mio, Q3 EUR 13 mio Life  Q3 09 net profit after minorities EUR 23 mio  Funds under management EUR 21.7 bn, +10% vs end 08 Non-Life  Q3 09 net profit after minorities EUR 14 mio  Combined ratio YTD of 104.5%, lower than H1 09 as both claims and expense ratio improved

FORTIS I I page 8 General 17/11/2009 I page 8 YTD 09 net result of EUR 711 mio (including eliminations) Q3 09 net result of EUR 53 mio (including eliminations)  EUR 83 mio: Net-of-tax positive impact revaluation call option on BNP Paribas shares Value RPN(I) and RPI unchanged in Q3  RPI : EUR 760 mio investment booked as goodwill; no change  RPN(I) : EUR 344 mio estimated cost future interest payments Other items in Q3 09  Net interest margin slightly negative in Q3 (YTD EUR 25 mio positive): – Interest period mismatch between assets & liabilities – Absence positive interest margin on EUR 5.7 bn subordinated loan structure Fortis Bank (unwound end of June)  Staff & administrative expenses of EUR 28 mio, including some one-off separation costs  Interest payment to Fortis Bank related to RPN of EUR 1.2 mio Net cash position General on 30 September of EUR 2.9 bn  Assuming full redemption EMTN; (EUR 1.0 bn outstanding at 30/09/2009)  Acceptance period from 10/11/09 til 30/11/09

FORTIS I Update Q3 valuation call option related to BNP Paribas shares 11/16/2009 I page 9 Valuation Black & Scholes as per 30/09/2009 Monetisation Adjustment post BNP Paribas capital increase Value as per 30/09/2009      Volatility impact set at 27% ► EUR 1,223 mio total value option as at 30 September  Dividend yield of 3.502% applied  Strike price used of EUR 66.52 per share, based on market price preemptive rights of rights issue BNP Paribas  Non standard features: 30% haircut ► EUR 856 mio  Volatility +5% ► total value option +26%  Fortis continues to examine all options  Call option is not fully ISDA-compliant  Adjustment strike price from EUR 68 to EUR 66.672 per share  Number of underlying shares remained unchanged at 121.2 mio  Net-of-tax valuation call option on BNP Paribas shares estimated at EUR 565 mio per 30 September 2009; Deferred tax charge of EUR 291 mio 17/11/2009 I page 9 17/11/2009 I page 9

FORTIS I Update Q3 valuation interest mechanism related to RPN(I) 11/16/2009 I page 10 Valuation technique Drivers interest payments Assumptions Value as per 30/09/2009      Net discounted value all future interest payments until a potential reimbursement of the CASHES  No change in methodology compared to end of June  Evolution Fortis’ share price  Evolution theoretical market value CASHES  Evolution long term interest rate  Fortis’ share price : EUR 3.20 per share (closing price 30/09/2009) + 3.75% long term rate annual increase  LT-value CASHES : 66% of par value  LT i-rate : 3.75% + 20bp  EUR 344 mio per 30/09/2009 mark-to-market value RPN(I)  Cash interest cost Q3 09: EUR 1.2 mio (YTD 09 EUR 1.7 mio) 17/11/2009 I page 10 17/11/2009 I page 10

FORTIS I Fortis Core equity EUR 5.8 bn above required regulatory minimum AG Insurance Insurance International General Other Core Tier 1 capital 11/16/2009 I page 11 Fortis Required Regulatory minimum EUR 5.8 bn above Minimum 17/11/2009 I page 11 26.1 ActualActualActual Minimum Actual Minimum 2.2 2.7 0.6 2.0 3.3 2.5 0.6 8.83.9 (0.1) 2.6 8.5 (0.3) 0.3 2.6 Minimum Core equity  167% 200% 360% 325% Core Solvency Ratio Total Solvency Ratio

FORTIS I I page 12 Discretionary Capital of the General Account: a view on liquidity & capital Assets Liabilities Cash & Cash equivalents Due from Fortis Bank Belgium Other Royal Park Investments Call option net of tax on BNP P Perpetual loan to AG insurance Total 4.1 0.9 0.4 0.8 0.6 0.1 6.9 ST (EMTN (1.0) + Bank (0.2)) NITSH I & NITSH II RPN(I) Other FRESH Net equity Total 1.2 0.9 0.4 0.4 1.2 2.8 6.9 Net Cash: EUR 2.9 bn Passed on LT assets & LT liabilities Discretionary Capital on balance sheet Shareholders equity + FRESH  Invested in non-current assets on balance sheet Total Capital  Contingent asset off balance (Fortis Bank Tier 1 loan, due Sept 2011)  Already committed to projects (Tesco JV and Italy) Discretionary Capital * (if available in cash) 4.0 1.5 2.5 1.0 0.2 1.3 EUR bn EUR bn EUR bn EUR bn EUR bn EUR bn EUR bn, 30 September 2009 * Fortis defines discretionary capital as the lower of the available cash and total capital of the General Account corrected for (contingent) illiquid assets and existing investment commitments  Part of discretionary capital will be reserved for prudential reasons in order to ensure liquidity at all times  The remainder might allow a number of potential investments currently under consideration and aimed at creating value  9/30/2009

FORTIS I Conclusion 11/16/2009 I page 13 Inflows Net result Outlook Strategic review      Solid and stable commercial performance in Life & Non-Life  Satisfying performance Insurance  Positive net result General due to result on call option on BNP Paribas shares  Unchanged vs end of June  Inflow levels still expected to be at least in line with last year  Full commitment towards execution  First announcements of partnerships, divestments and discontinuations 17/11/2009 I page 13 17/11/2009 I page 13

FORTIS I I page 14 Cautionary Statements 17/11/2009 I page 14 Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Future actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in Fortis’ core markets, (ii) performance of financial markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) increasing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the Economic and Monetary Union, (x) changes in the policies of central banks and/or foreign governments and (xi) general competitive factors, in each case on a global, regional and/or national basis. In addition, the financial information contained in this presentation, including the pro forma information contained herein, is unaudited and is provided for illustrative purposes only. It does not purport to be indicative of what the actual results of operations or financial condition of Fortis and its subsidiaries would have been had these events occurred or transactions been consummated on or as of the dates indicated, nor does it purport to be indicative of the results of operations or financial condition that may be achieved in the future. “

FORTIS I Fortis Investor Relations 11/16/2009 I page 15 Tel: E-mail: Website: 17/11/2009 I page 15 17/11/2009 I page 15 + 32 2 565 53 78 + 31 30 226 65 66 ir@fortis.com www.fortis.com 

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