Aegon’s Fourth Quarter Results Show Profit Increase

aegonsAegon NV (AEG) recently posted their financial results for the fourth quarter, which showed the company achieved a significant improvement in profit levels. Thus, the company achieved a quarterly attributable net income of EUR 399 million ($454.3 million), compared to the EUR 155 million ($176.48 million) achieved during the same quarter of one year ago, representing an increase of approximately 157 percent.

The company underlying earnings of EUR 562 million, representing a growth of 19 percent from the fourth quarter of FY 2013, when the company’s earnings before tax amounted to EUR 473 million. It also represents a sequential growth of approximately 93 percent as the company’s pre-tax earnings in Q3 FY 2016 amounted to EUR 291 million.

Aegon stated that the increase in earnings was the result of business growth of EUR 37 million, a release of employee benefits in the Netherlands amounting to EUR 45 million and exchange rates, namely the stronger US dollar, that amounted to EUR 25 million.

While the companies hedging schemes and their alternative investments led to a loss on fair value items of EUR 132 million, the company did state that their net income grew in part due to improved realized gains on their investments.

The company stated their asset base showed continued expansion, while they experienced solid growth in sales in key markets. Thus, the company saw their gross deposits increase by 29 percent, reaching EUR 13.7 billion, which was the result of the asset management segment of the business, as well as mutual funds, Knab and variable annuities. Net deposits amounted to EUR 2.4 billion in the quarter.

Aegon’s life sales saw improvement of 9 percent, reaching EUR 523 million, which was mainly driven by better sales in the United States and Asia. Sales of general, accident and health insurance also increased, seeing a 14 percent rise, which meant they reached EUR 226 million, again driven mainly by better figures in the Unites States.

The company stated they achieved their targets in terms of fixed charge cover and gross leverage after redemption of debt. Thus, the company’s gross leverage ratio increase so it now stands at 28.7 percnet, while their fixed charge cover also went up to a multiple of 6.5. Operational free chase flow adjusted for market impact and one-off costs came in at 338 million.

Alex Wynaendts, the Chief Executive Officer of Aegon, stated that the Q4 results rounded out a good year for the company, despite how challenging the business environment has been, including obstacles such as increased market volatility and persistently low interest rates. He further explained that the increase in sales shows precisely how much customers trust the company and how strong their franchise is.

Mr. Wynaendts stated that in an effort to optimize their business portfolio, the company has announced they will be selling off their Canadian operations as well as their shares in the French La Mondiale Participations. The company continues to invest in various opportunities for growth, such as the recent partnership Aegon signed with La BanquePostale in France.

The CEO of Aegon announced the company will be increasing their final dividend to EUR 0.12 per share. The company has a market cap of $20.29 billion. Their shares have been trading between $6.97 and $9.34 over the past 52 weeks.


Eric Hanson covers Software and Computer Analytics companies within the Business Services group. Eric was named by Forbes in June 2013 as one of the best brokerage analysts in the Consumer Discretionary sector.

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