AEGON Announces Ambitious Targets as Part of new Growth Strategy
June 02 2008 - 3:00AM
PR Newswire (US)
AEGON Targets Average Underlying Earnings Growth of at Least 10% a
Year THE HAGUE, Netherlands, June 2 /PRNewswire-FirstCall/ -- AEGON
Chief Executive Alex Wynaendts announces additional financial
performance targets as part of an ambitious strategy to ensure
sustainable profitable growth for the Group in the coming years.
AEGON is committed to clear targets: - Return on equity of at least
14% by 2010 and at least 15% by 2012 compared with 12% in 2007; -
Average net underlying earnings growth of at least 10% a year to
2012 from a 2007 base of EUR 2,033 million (at 2007 constant
currency); - Strong profitable growth with the reiterated value of
new business target of EUR 1,250 million by 2010. Opening AEGON's
Analyst & Investor Conference in London later today, Mr.
Wynaendts will outline AEGON's growth strategy, 'Unlocking the
Global Potential', which has three strategic priorities: - To
reallocate capital toward businesses with higher growth and return
prospects; - To improve growth and returns from existing
businesses; - To manage AEGON as an international Group. To achieve
these priorities, AEGON's strategy includes a number of specific
measures: 1. Reallocate capital toward businesses with higher
growth and return prospects - Capture opportunities in the most
attractive markets; - Accelerate growth in new markets to achieve a
more balanced international presence with an allocation of more
than 50% of the Group's capital to businesses outside the United
States by 2012; - Improve capital efficiency; - Continue to pursue
a disciplined, focused approach toward acquisitions; - Divest
underperforming assets to release capital for growth. 2. Improve
growth and returns from existing businesses - Invest in higher
growth, higher return businesses in the United States; - Accelerate
diversification of both products and distribution in the United
Kingdom; - Develop a new plan to deliver profitable growth in the
Netherlands; - Build scale in new, growing markets in Europe, Asia
and Latin America. 3. Manage AEGON as an international Group -
Create a global asset management business; - Manage life
reinsurance as a global business; - Become a leader in variable
annuities in Europe; - Broaden the role of AEGON's Management Board
to provide a more effective management structure. "Today's global
environment requires us to think and act differently. It's clear
that we can and will do better with AEGON's significant resources,"
said Chief Executive Alex Wynaendts. "We will make better use of
our capital, improve our financial performance and organize the
management of AEGON to focus on the global opportunities for our
businesses. We are determined to solidify AEGON's leading position,
to deliver sustainable profitable growth for our investors and to
help millions of customers around the world secure their long-term
financial futures." AEGON's ambition is to be a global leader,
helping customers around the world secure their financial futures
and ensuring sustainable profitable growth by reallocating capital
towards businesses with higher growth and return prospects,
improving growth and returns from existing businesses and managing
AEGON as an international Group. Creating a global asset management
business In the coming months, AEGON will create a single, global
organization for its asset management activities. AEGON Asset
Management will group together AEGON's current businesses in the
United States, the United Kingdom, the Netherlands and elsewhere.
AEGON Asset Management has a total of EUR 271 Billion(1) in assets
under management. With this new organization, AEGON will: -
Implement a global framework for general account management; -
Support the Group's pension and unit-linked activities by building
a European third party capability; - Develop increased flows of
third party business. AEGON Asset Management is expected to be
operational by the beginning of January 2009. Erik van Houwelingen,
currently a member of the Management Board of AEGON The
Netherlands, has been appointed Chairman of the Executive Committee
of AEGON Asset Management. Eric Goodman, AEGON's Chief Investment
Officer for the United States, will take charge of global general
account management. Andrew Fleming, currently CEO of AEGON UK Asset
Management, has been appointed Head of European Asset Management
and will take charge of developing our European third party
capability. Manage life reinsurance as a global business AEGON has
recognized expertise in life reinsurance. Currently, the Group is
the sixth largest life reinsurer in the world by premium income and
the second largest in the United States. AEGON's goal is to
accelerate growth in global life reinsurance by: - Expanding into
new, growing markets in Asia, Europe and Latin America; - Focusing
on partnerships away from commodity products; - Providing support
to other areas of AEGON's businesses. Launching variable annuities
across Europe In the coming years, the variable annuities market is
expected to grow significantly as millions of 'baby boomers' in
Europe, North America and Asia enter retirement. AEGON already has
a significant presence in the US variable annuities market. The
Group's ambition is to become a leader in the variable annuities
market in Europe. As part of this goal, AEGON intends to: -
Capitalize on US expertise in this area to support the Group's
variable annuities in Europe; - Build on recent success in this
area in the United Kingdom to expand into other markets in Europe,
starting with Spain and France, where AEGON already has businesses;
- Expand elsewhere in Europe through distribution agreements with
banks and brokers. Broadening the role of AEGON's Management Board
As part of the new strategy, AEGON will also make changes to the
role and responsibilities of the Management Board. These changes
will strengthen AEGON's corporate governance and align the overall
management of the Group with the emerging, global opportunities for
AEGON's businesses. Under the new structure, members of the
Management Board will have the following responsibilities: Alex
Wynaendts (Chief Executive Officer) Jos Streppel (Chief Financial
Officer) Corporate Center Pat Baird Americas, Asia-Pacific, Global
Life Reinsurance Marco Keim Netherlands Otto Thoresen United
Kingdom, Variable Annuities in Europe, India Gábor Kepecs Central
& Eastern Europe (1) As per end 2007 VALUE OF NEW BUSINESS
TARGETS 2005 2007 2010 In millions actual actual target Total EUR
550 927 1,250 Americas USD 340 581 730 The Netherlands EUR 39 51 82
United Kingdom GBP 67 157 213 Asia EUR 83 78 105 Central and
Eastern Europe EUR 27 72 100 Other European Countries EUR 30 71 147
CAPITAL PRODUCTIVITY 2007 2010 2012 actual target target Unlevered
return on capital(1),(2)(RoC) 9.6% >11% >12% Holding and
leverage effects 2.4% 3% 3% Return on equity 2), 3) (RoE) 12%
>14% >15% 1) Weighted average of return on capital of country
units 2) 2007 number adjusted for non-recurring tax benefits in the
UK and the Netherlands 3) Net underlying earnings / average
shareholder's equity excluding revaluation reserves Conference
program AEGON's Analyst & Investor Conference will take place
in London on June 2 and 3. Mr. Wynaendts' strategy presentation
will be webcast live via AEGON's corporate web site
(http://www.aegon.com/) at 17:00 BST (18:00 CET) on Monday, June 2,
2008. Slides from all the presentations will be available on the
same site from 16:30 BST (17:30 CET) on Monday, June 2: Unlocking
the Global Potential Alex Wynaendts, CEO AEGON N.V. AEGON Asset
Management Erik van Houwelingen, Chairman of the Executive
Committee of AEGON Asset Management Integrated Capital & Risk
Management Jos Streppel, CFO AEGON N.V. Michiel van Katwijk,
Executive Vice President AEGON N.V. AEGON Americas & Global
Life Reinsurance Pat Baird, Member of the AEGON Management Board
Darryl Button, CFO AEGON USA AEGON United Kingdom & Variable
Annuities in Europe Otto Thoresen, Member of the AEGON Management
Board Mark Laidlaw, CFO AEGON UK New Markets, AEGON Central &
Eastern Europe Gábor Kepecs, Member of the AEGON Management Board
New Markets, AEGON Asia Marc van Weede, Executive Vice President
Strategy AEGON N.V. AEGON is one of the world's largest life
insurance and pension groups, and a strong provider of investment
products. AEGON empowers local business units to identify and
provide products and services that meet the evolving needs of
customers, using distribution channels best suited to local
markets. AEGON takes pride in balancing a local approach with the
power of an expanding global operation. With headquarters in The
Hague, the Netherlands, AEGON companies employ approximately 30,000
people worldwide. AEGON's businesses serve millions of customers in
over twenty markets throughout the Americas, Europe, and Asia.
Respect, quality, transparency and trust constitute AEGON's core
values as the company continually strives to meet the expectations
of customers, shareholders, employees and business partners. AEGON
is driven to deliver new thinking with the ambition to be the best
in the industry. Local currencies and constant currency exchange
rates This press release contains certain information about our
results and financial condition in USD for the Americas, GBP for
the United Kingdom, because those businesses operate and are
managed primarily in those currencies. Certain comparative
information presented on a constant currency basis eliminates the
effects of changes in currency exchange rates. None of this
information is a substitute for or superior to financial
information about us presented in EUR, which is the currency of our
primary financial statements. Forward-looking statements The
statements contained in this press release that are not historical
facts are forward-looking statements as defined in the US Private
Securities Litigation Reform Act of 1995. The following are words
that identify such forward-looking statements: believe, estimate,
target, intend, may, expect, anticipate, predict, project, counting
on, plan, continue, want, forecast, should, would, is confident,
will, and similar expressions as they relate to our company. These
statements are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict.
We undertake no obligation to publicly update or revise any
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which merely
reflect company expectations at the time of writing. Actual results
may differ materially from expectations conveyed in forward-looking
statements due to changes caused by various risks and
uncertainties. Such risks and uncertainties include but are not
limited to the following: - Changes in general economic conditions,
particularly in the United States, the Netherlands and the United
Kingdom; - Changes in the performance of financial markets,
including emerging markets, such as with regard to: - The frequency
and severity of defaults by issuers in our fixed income investment
portfolios; and - The effects of corporate bankruptcies and/or
accounting restatements on the financial markets and the resulting
decline in the value of equity and debt securities we hold; - The
frequency and severity of insured loss events; - Changes affecting
mortality, morbidity and other factors that may impact the
profitability of our insurance products; - Changes affecting
interest rate levels and continuing low or rapidly changing
interest rate levels; - Changes affecting currency exchange rates,
in particular the EUR/USD and EUR/GBP exchange rates; - Increasing
levels of competition in the United States, the Netherlands, the
United Kingdom and emerging markets; - Changes in laws and
regulations, particularly those affecting our operations, the
products we sell, and the attractiveness of certain products to our
consumers; - Regulatory changes relating to the insurance industry
in the jurisdictions in which we operate; - Acts of God, acts of
terrorism, acts of war and pandemics; - Changes in the policies of
central banks and/or governments; - Litigation or regulatory action
that could require us to pay significant damages or change the way
we do business; - Customer responsiveness to both new products and
distribution channels; - Competitive, legal, regulatory, or tax
changes that affect the distribution cost of or demand for our
products; - Our failure to achieve anticipated levels of earnings
or operational efficiencies as well as other cost saving
initiatives; and - The impact our adoption of the International
Financial Reporting Standards may have on our reported financial
results and financial condition. Group Corporate Communications
& Investor Relations Media relations Phone: +31(0)70-344-8344
E-mail: Investor relations Phone: +31(0)70-344-8305 or
+1-877-548-9668 - toll free USA only E-mail: Webcast on
http://www.aegon.com/ Press conference 11:00 BST - 12:00 CET
Analyst & investor conference 17:00 BST - 18:00 CET Website
http://www.aegon.com/ DATASOURCE: AEGON N.V. CONTACT: Group
Corporate Communications & Investor Relations: Media relations,
Phone: +31(0)70-344-8344, E-mail: ; Investor relations, Phone:
+31(0)70-344-8305 or +1-877-548-9668 - toll free USA only, E-mail:
, Webcast on http://www.aegon.com/; Press conference: 11:00 BST -
12:00 CET; Analyst & investor conference: 17:00 BST - 18:00 CET
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