Swiss Life Holding ((CH:SLHN)) has held its Q4 earnings call. Read on for the main highlights of the call.
Swiss Life Holding’s recent earnings call conveyed a robust performance for 2024, marked by impressive achievements in fee results, profit from operations, and cash remittance. Despite facing challenges such as revenue decreases and declines in the value of new business in Switzerland and Germany, the positive highlights significantly overshadowed the negatives.
Fee Result Achieves Target Range
The fee result for Swiss Life increased by 33% to $875 million, reaching the middle of the CHF 850 million to CHF 900 million target range for 2024. This achievement underscores the company’s effective strategy in managing its fee-based business.
Strong Growth in Profit from Operations
Swiss Life reported a 20% growth in profit from operations, totaling CHF 1.78 billion. This growth was primarily driven by the asset managers and the French insurance business, highlighting the strength of these segments.
Increase in Net Profit
The company saw a 13% increase in net profit, reaching CHF 1.26 billion. This reflects Swiss Life’s ability to enhance profitability despite market challenges.
High Return on Equity
Return on equity rose to 16.6%, exceeding the target range of 10% to 12%. This significant increase demonstrates Swiss Life’s efficient use of equity to generate profits.
Cash Remittance Growth
Cash remittance grew by 14% to CHF 1.3 billion, benefiting from positive one-offs and timing effects. This growth is a testament to Swiss Life’s strong cash flow management.
Dividend Increase
Swiss Life proposed a 6% increase in the dividend, raising it to CHF 35 per share, which corresponds to a payout ratio of 81%. This move reflects the company’s commitment to returning value to shareholders.
Successful Swiss Life 2024 Program Completion
The Swiss Life 2024 program successfully exceeded all group financial targets and laid a solid foundation for the upcoming Swiss Life 2027 program.
Asset Managers’ Strong Performance
The asset managers segment reported a 22% increase in total income, reaching CHF 1.2 billion, driven by strong performance in equities and real assets.
Net New Assets in TPAM Business
The TPAM business attracted CHF 9.5 billion in net new assets, fueled by robust inflows in equities and real assets, showcasing the segment’s growth potential.
Decrease in Revenues
Revenues fell by 1% to CHF 8.7 billion, impacted by lower CSM release and FX effects, indicating areas for potential improvement.
Increase in Service Expenses
Service expenses rose to CHF 7.6 billion, aligning with higher PAA revenues and non-viable expenses, reflecting the cost pressures faced by the company.
Value of New Business Decline in Switzerland
The value of new business in Switzerland decreased by 19% to CHF 189 million due to lower volumes and business mix effects, highlighting challenges in this market.
Value of New Business Decline in Germany
In Germany, the value of new business fell by 24% to €46 million, attributed to lower unit-linked volumes and acquisition cost efficiency issues.
Challenges in International Segment
The international segment faced a 4% decrease in premiums to €1.7 billion, mainly due to lower premiums with private clients, indicating a need for strategic adjustments.
Forward-Looking Guidance
Swiss Life’s forward-looking guidance emphasizes continued growth and efficiency. The Swiss Life 2027 program aims to increase customers, advisors, and efficiency, driving earnings growth and enhancing cash returns to shareholders. The company remains focused on maintaining its strong financial performance and delivering value to stakeholders.
In conclusion, Swiss Life Holding’s earnings call highlighted a strong performance with significant achievements in key financial metrics. Despite some challenges, the company’s strategic initiatives and forward-looking plans position it well for future growth and success.