The Hague – November 10,
2022
Other charges
Other charges amounted to EUR
107 million and primarily reflected one-time investments related to the
operational improvement plan, which amounted to EUR
79 million.
Net result
The result before tax amounted to a loss of
EUR 300 million. After a tax benefit of EUR 94 million,
the net result was a loss of EUR 206 million.
Expenses
Addressable expenses decreased by EUR
33 million on a constant currency basis compared with the
third quarter of 2021 to EUR 745 million. The benefit from
expense savings initiatives, notably in the US, and lower
performance-related compensation expenses was only partly offset by
additional investments in growth initiatives across the group, and
other elements including higher own employee pension costs in the
Netherlands.
Operating expenses of EUR 987 million
increased by 4% compared with the third quarter of 2021. Lower
addressable expenses and the impact of the completion of the sale
of Aegon’s businesses in Hungary and Turkey were more than offset
by unfavorable currency effects, higher one-time investments in the operational
improvement plan and increased project costs for IFRS 9 and 17
implementation.
Shareholders’ equity
Shareholders’ equity excluding revaluation
reserves was EUR 19.6 billion, or EUR 9.56 per common share,
on September 30, 2022, and remained stable compared with
June 30, 2022. The reduction in equity from the net loss and
dividends paid were offset by favorable currency
movements.
Gross financial leverage
Gross financial leverage increased by EUR
0.1 billion in the third quarter of 2022, to EUR
5.8 billion per September 30, 2022. This increase was
driven by the strengthening of the US dollar against the
euro.
Cash Capital at Holding and free cash flow
Aegon’s Cash Capital at the Holding decreased
from EUR 1,680 million to EUR 1,368 million during the
third quarter of 2022. This was largely due to the previously
announced capital returns to shareholders of EUR 373 million,
and consisted of the final 2021 dividend, the cash portion of the
interim 2022 dividend, and the second EUR 100 million tranche
of Aegon’s EUR 300 million share buyback program. The capital
return to shareholders was partly offset by free cash flow of EUR
67 million. Other items led to an outflow of EUR
6 million, as proceeds from closing the sale of one of the
investments of Aegon’s European venture capital fund were more than
offset by hedge expenses and capital injections into smaller
units.
On March 23, 2022, Aegon announced its
intention to return surplus cash capital to its shareholders via a
EUR 300 million share buyback, barring unforeseen
circumstances. The share buyback is being executed in three
tranches of EUR 100 million each, with each tranche being
conditional on maintaining the capital positions of Aegon’s main
units in line with their stated ambitions, and the Cash Capital at
the Holding being above the middle of the operating range. The
third and final tranche of EUR 100 million is expected to be
completed on or before December 15, 2022.
Capital ratios
Aegon’s Group Solvency II ratio decreased
from 214% to 212% during the third quarter of 2022, driven by
negative capital generation after holding expenses of EUR
74 million, a reduction of eligible own funds due to tiering
restrictions and a reduction of group diversification benefits.
Unfavorable market movements totaled EUR 306 million, and
notably included the impact of lower equity markets in the United
States. One-time items
amounted to a loss of EUR 101 million. Operating capital
generation amounted to EUR 333 million after holding expenses,
reflecting mainly strong performance from US, driven by seasonality
and income from alternative investments.
3Q 2022 Results - 11