2012 full year results
Mark Wilson, Group Chief Executive Officer, said:
"2012 was a year of transition at Aviva. There has been solid progress against the turnaround plan set out last year. Our capital strength has improved materially and we have completed the vast proportion of the disposal programme. We have made progress reducing costs and we also have a strong new management team in place.
"The £3 billion loss after tax is driven principally by writedowns we have previously announced due to the agreed sale of our US business. Operating profit levels were healthy across our major businesses, especially in the UK, France and Canada.
"The rebasing of the dividend and the elimination of the dilutive scrip is about giving certainty to shareholders, reducing debt, and putting Aviva in a sound position for the future. This is the right course of action.
"Aviva has many strengths to build on. We have a number of market leading businesses capable of delivering progressive cashflows and other businesses that offer genuine growth potential. My intention is that Aviva will be a simpler business with a robust balance sheet that delivers sustainable cashflows and growth."
- Good progress on disposals and turnaround programme
- £3,050m loss principally arising from the sale of the US as previously disclosed
- Economic capital surplus increased by £3.5bn to £7.1bn1
- 2012 total dividend 19p from 26p. Final dividend 9p from 16p
- Priorities: cashflow and debt reduction
Results
- Total loss after tax £3,050 million (2011: profit of £60 million) including previously announced £3.3 billion writedown on US disposal
- Operating profit on an underlying2 basis of £1,776 million (2011: £1,857 million) after adverse foreign exchange impact of £65 million
Dividend rebased and scrip removed
- Final 2012 dividend of 9 pence per share (2011: 16 pence), full-year dividend 19 pence per share, (2011: 26 pence).
- Dividend rebased to reduce leverage and increase retained earnings, ensuring dividend distribution is covered by earnings and cashflows
- Removal of dilutive scrip: will improve earnings per share and gives clarity to cashflows and dividend
Capital and cashflows
- Proforma economic capital surplus3 £7.1 billion, 172% (2011: £3.6 billion, 130%)
- IFRS net asset value of 278p (2011: 435p)
- Interdivisional balance between Group and UK General Insurance replaced with an interest bearing loan of which £600 million will be repaid over the next three years
- £944 million net cash remittances to Group in 2012 (2011: £778 million)
Status of 2012 turnaround plan
- Significant disposals announced: US, Delta Lloyd, Aseval, Malaysia, Sri Lanka, Russia
- £275 million annualised cost savings realised
- Internal and external leverage have increased and must be reduced
1. On a proforma basis. Includes the benefit of completing the US and Aseval transactions announced in December 2012 and the Delta Lloyd and Malaysia transactions announced in January 2013.
2. In 2012, operating profit on an underlying basis represents Aviva Group excluding Delta Lloyd and the United States. 2011 operating profit on an underlying basis represents Aviva Group excluding Delta Lloyd, United States and RAC.
3. The economic capital surplus represents an estimated unaudited position. The capital requirement is based on Aviva's own internal assessment and capital management policies. The term 'economic capital' does not imply capital as required by regulators or other third parties. Pension scheme risk is allowed for through ten years of stressed contributions.
Download the full announcement PDF (1.30 MB)
Contacts
Investor contacts
Mark Wilson
+44 (0)20 7662 2286
Pat Regan
+44 (0)20 7662 2228
Charles Barrows
+44 (0)20 7662 8115
David Elliot
+44 (0)20 7662 8048
Media contacts
Nigel Prideaux
+44 (0)20 7662 0215
Andrew Reid
+44 (0)20 7662 3131
Sarah Swailes
+44 (0)20 7662 7600
Timings
Media conference call
0715 hrs GMT
Analyst presentation
0745 hrs GMT
Presentation slides available at www.aviva.com from
0630 hrs GMT
Live webcast
www.aviva.com