Allianz 1Q results signal good start into 2018, on track to meet targets
- Internal revenues grow 4.9 percent
- Operating profit down 6.0 percent or 176 million euros to 2.8 billion euros, including 142-million-euro negative currency translation effect
- Operating profit at 25 percent of full-year target-range midpoint
- Net income attributable to shareholders up 6.8 percent to 1.9 billion euros due to lower tax charge and lower restructuring charges
- Solvency II ratio at strong 225 percent at the end of 1Q 2018 versus 229 percent at end-2017
Management Summary: Strong top and bottom lines, operating result eases largely due to currency shifts
Allianz Group had a good start into 2018, posting a 6.8 percent rise in net income attributable to shareholders. Internal revenue growth, which adjusts for currency and consolidation effects, was 4.9 percent with positive contributions from all business segments. Total revenues increased 0.7 percent to 36.5 (first quarter of 2017: 36.2) billion euros. Operating profit decreased 6.0 percent or 176 million euros to 2.8 (2.9) billion euros. The main drivers for the decrease were 142 million euros currency translations and 148 million euros benefit in the prior year related to our corporate pension administration. Operating performance for the quarter is precisely at 25 percent of the Group’s full-year operating profit target, signaling that results are well on track.
Net income attributable to shareholders rose to 1.9 (1.8) billion euros, a 6.8 percent increase versus the first quarter of 2017, driven by a higher non-operating investment result, a decrease in restructuring charges and a lower effective tax rate.
Basic Earnings per Share (EPS) rose to 4.46 (4.00) euros. Annualized Return on Equity (RoE) was 13.8 percent (full year 2017: 11.8 percent). The Solvency II capitalization ratio remained a strong 225 percent at the end of the quarter compared to 229 percent recorded at the end of 2017.
On April 27, 2018, Allianz Group successfully completed the acquisition of Euler Hermes minorities and delisted Euler Hermes’ shares from Euronext Paris. This operation marked an important step in Allianz Group’s strategy to deploy capital in strategic businesses that deliver solid operating performance, and to strengthen positions in core markets and in Property and Casualty insurance in particular.
Separately, the Group completed its second share buy-back program, which was launched in early 2018, with a volume of 2.0 billion euros and 10.4 million shares in early May.
“Allianz enjoyed a good start into 2018. We had increases in both the top and the bottom lines, even if market volatility was visible at an operating level in the first quarter. This good performance puts Allianz on track to meet its 2018 yearly targets,” said Oliver Bäte, Chief Executive Officer of Allianz SE.
