half year financial report · 2019-08-01 · activity report – half year 2019 7 half year 2019...
TRANSCRIPT
Half Year Financial Report
/
June 30, 2019
TABLE OF CONTENTS
I. Activity Report………………………………………...3
II. Consolidated financial statements ………………..77
III. Statutory auditors’ review report
on the 2019 Half Year Financial Information ……118
IV. Statement of the person responsible for the Half
Year Financial Report ……………………….……..121
I. Activity Report
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June 30, 2019
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IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND THE USE OF NON-GAAP FINANCIAL MEASURES
Certain statements contained herein may be forward-looking statements including, but not limited to,
statements that are predictions of or indicate future events, trends, plans, expectations or objectives. Undue
reliance should not be placed on such statements because, by their nature, they are subject to known and
unknown risks and uncertainties and can be affected by other factors that could cause AXA’s actual results to
differ materially from those expressed or implied in such forward looking statements. Please refer to Part 4 - “Risk
Factors and Risk Management” of AXA’s 2018 Registration Document, for a description of certain important
factors, risks and uncertainties that may affect AXA’s business and/or results of operations. AXA undertakes no
obligation to publicly update or revise any of these forward-looking statements, whether to reflect new
information, future events or circumstances or otherwise, except as required by applicable laws and regulations.
In addition, this report refers to certain non-GAAP financial measures, or alternative performance measures
(“APMs”), used by Management in analyzing AXA’s operating trends, financial performance and financial position
and providing investors with additional information that Management believes to be useful and relevant
regarding AXA’s results. These non-GAAP financial measures generally have no standardized meaning and
therefore may not be comparable to similarly labelled measures used by other companies. As a result, none of
these non-GAAP financial measures should be considered in isolation from, or as a substitute for, the Group’s
consolidated financial statements and related notes prepared in accordance with IFRS. A reconciliation from
APMs Adjusted Earnings, Underlying Earnings and Underlying Combined Ratio to the most directly reconcilable
line item, subtotal or total in the financial statements of the corresponding period is provided on pages 20 to 22
of this report. APMs Adjusted Return on Equity and Underlying Earnings per share are reconciled to the financial
statements in the table set forth on page 30 of this report, and Debt Gearing is reconciled to the financial
statements in the table set forth on page 29 of this report The above-mentioned and other non-GAAP financial
measures used in this report are defined in the Glossary set forth on pages 69 to 76 of this report.
The results of our US segment are presented herein on the basis of IFRS and are not, and should not be relied
upon as representing, the US GAAP results of AXA Equitable Holdings, Inc. (“EQH”) (including AllianceBernstein),
which, as a US public company, reports in US GAAP in accordance with the rules of the US Securities and Exchange
Commission (“SEC”). For further information on EQH’s financial results and other public reports please consult
the SEC website (www.sec.gov).
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REPORTING CHANGES
Following the completion of the acquisition of XL Group on September 12, 2018, and in line with the 2018
Registration Document, the financial reporting has been aligned and retroactively restated in this report under
the seven following segments:
France (insurance and banking activities, and holdings);
Europe, consisting of:
o Switzerland (insurance activities),
o Germany (insurance and banking activities, and holdings),
o Belgium (insurance activities and holdings),
o United Kingdom & Ireland (insurance activities and holdings),
o Spain (insurance activities),
o Italy (insurance activities and holdings);
Asia, consisting of:
o Japan (insurance activities and holdings),
o Hong Kong (insurance activities),
o Asia High Potentials, consisting of:
Thailand (insurance activities),
Indonesia (insurance activities),
China (insurance activities),
The Philippines (insurance activities),
o Asia - Direct, consisting of:
Direct Japan (insurance activities),
Direct South Korea (insurance activities),
o Asia Holdings;
AXA XL, consisting of:
o XL Group (insurance activities and holdings),
o AXA Corporate Solutions Assurance (insurance activities),
o AXA Art (insurance activities);
United States (insurance activities, AB and holdings);
International, consisting of:
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o 14 countries (1) within Europe, Middle East, Africa & Latin America, mainly including Turkey,
Mexico, Morocco, Czech Republic & Slovak Republic and Luxembourg (insurance activities and
holdings),
o Singapore (insurance activities and holdings),
o Malaysia (insurance activities),
o India (insurance activities and holdings),
o AXA Bank Belgium (banking activities);
Transversal & Central Holdings, consisting of:
o AXA Investment Managers,
o AXA Assistance,
o AXA Liabilities Managers,
o AXA Global Re,
o AXA Life Europe,
o AXA SA and other Central Holdings.
(1) For the full list of countries, see the Glossary on pages 69 and 70.
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Market Environment
FINANCIAL MARKET CONDITIONS
In the first half of 2019, equity markets across the world surged supported by investors’ anticipations of an easing
of monetary policies: as global activity is decelerating in a context of low inflation, central banks are expected to
cut interest rates thus pushing government bond yields lower in most countries. The improvement in market
conditions was also driven by recent positive developments in global trade discussions: although trade tensions
between the United States and China have been weighing on the global economic outlook, further tariff increases
from the United States on imports of Chinese goods were avoided during the recent G20 meeting in Japan in June,
spreading some optimism.
In Europe, some of the uncertainty factors of 2018, including the widening of Italian spreads and difficulties for
the German automobile sector, softened in the first quarter of 2019 and the Euro zone registered a 1.6% growth.
However, manufacturing activity slowed down in the second quarter of 2019 as international trade tensions
mounted. Consequently, the European Central Bank (ECB) announced the postponement of actions to tighten its
monetary policy to 2020 at the earliest, which led to a decrease in European government bond yields. In parallel,
the USD appreciated against Euro.
In France, domestic unrest softened in the first half of 2019, and GDP rose by 1.0% in the first semester. However,
France was affected by the deceleration in the manufacturing sector. Announcements of the ECB also impacted
the French economic indicators as the 10-year government bonds yields fell into negative territory, while the
CAC40 equity index rose by 17% since the end of 2018.
In the United Kingdom, the growth outlook weakened further due to Brexit uncertainties: the United Kingdom
was initially expected to leave the European Union on March 31, 2019, but its exit has been deferred to October
31, 2019. The sterling depreciated against the US dollar, bond yields fell while the FTSE 100 index rose.
In the United States, the GDP rose by 2.6% in the first semester of 2019, and unemployment reached its lowest
level in decades. Trade tensions with China, notably with an increase in tariffs from 10% to 25% on Chinese
imports in May, exacerbating concerns over the projected economic slowdown in 2019. The Federal Reserve
confirmed a potential easing of its monetary policy which led to falling US government bond yields and surging
US stocks reaching an all-time high.
In Asia, growth suffered from both trade tensions and a weakening external demand in a context of slowing global
economic growth. Japan posted stronger-than-expected GDP growth of 2.1% in the first quarter of 2019,
benefiting mostly from government support. In a context of low interest rates, the Bank of Japan announced it
would continue to pursue monetary easing, pushing Japan government bond yields lower. In China, growth
appeared to be stabilizing following several quarters of deceleration. Recent activity was supported by both
monetary and fiscal measures, but remains vulnerable to a slowdown in manufacturing activity and trade
tensions. Asian stocks rose in the first half of 2019, recovering from the sharp decline of the last quarter of 2018.
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Stock Markets
The MSCI World Index increased by 15.3% in the first half of 2019.
The MSCI G7 index increased by 15.4% and the MSCI Emerging index increased by 8.7%.
The Dow Jones Industrial Average index increased by 14.0% and the S&P 500 index increased by 17.3% in the first
half of 2019. Equity markets in Japan and Europe posted gains in the first half of 2019: the Nikkei index in Tokyo
increased by 6.3%, the FTSE 100 index in London increased by 10.4%, and the EUROSTOXX 50 index in the
Eurozone increased by 15.7%.
The S&P 500 implied volatility index (VIX) decreased from 25.4% on December 31, 2018, to 15.1% on June 30, 2019.
Bond Markets
Government bond yields decreased in the first half of 2019 in mature economies: the 10-year French government
bond yield decreased by 72 bps to -0.01%, the 10-year Belgium government bond yield decreased by 70 bps to
0.07%, the 10-year US T-bond yield decreased by 64 bps to 2.05%, the 10-year German Bund yield decreased by
57 bps to -0.33%, the 10-year UK government bond yield decreased by 44 bps to 0.83%, the 10-year Swiss
government bond yield decreased by 37 bps to -0.54%, and the 10-year Japan government bond yield decreased
by 14 bps to -0.14%.
In the Eurozone peripheral countries, the 10-year government bond yields decreased as well: -192 bps to 2.46%
in Greece, -125 bps to 0.48% in Portugal, -103 bps to 0.39% in Spain, -73 bps to 0.17% in Ireland and -68 bps to
2.09% in Italy.
In Europe, the iTraxx Main spreads decreased by 36 bps to 53 bps compared to December 31, 2018, and the iTraxx
Crossover decreased by 100 bps to 254 bps. In the United States, the CDX Main spread Index decreased by 33 bps
to 55 bps.
The Euro interest rates implied volatility index (based on 10x10 Euro swaptions) increased from 46.5% as of
December 31, 2018, to 106.8% as of June 30, 2019.
Exchange Rates
End of Period Exchange rate Average Exchange rate
June 30, 2019 December 31, 2018 June 30, 2019 June 30, 2018
(for €1) (for €1) (for €1) (for €1)
US Dollar 1.14 1.14 1.13 1.21
Japanese Yen 123 125 124 132
British Sterling Pound 0.89 0.90 0.87 0.88
Swiss Franc 1.11 1.13 1.13 1.17
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Operating Highlights
Governance
RE-APPOINTMENT OF MR. JEAN-PIERRE CLAMADIEU AS DIRECTOR, AND RATIFICATION OF THE COOPTATION
OF MRS. ELAINE SARSYNSKI AS DIRECTOR
On April 24, 2019, AXA’s Shareholders’ Meeting approved the reappointment of Mr. Jean-Pierre Clamadieu as
director for a four-year term. The Board of Directors held following the Shareholders’ Meeting confirmed his
appointment as Chairman of the Compensation & Governance Committee and Senior Independent Director.
AXA’s Shareholders’ Meeting also ratified the cooptation of Mrs. Elaine Sarsynski as director.
GÉRALD HARLIN IS RETIRING AT THE END OF THE YEAR, ÉTIENNE BOUAS-LAURENT WILL SUCCEED HIM AS
GROUP CFO ON JANUARY 1, 2020. ÉTIENNE BOUAS-LAURENT, KARIMA SILVENT AND GEORGES DESVAUX TO
JOIN AXA’S MANAGEMENT COMMITTEE
On June 20, 2019, AXA announced that after 29 years with the Group, Gérald Harlin, Group Deputy CEO and Chief
Financial Officer, and a Member of AXA’s Management Committee has decided to retire on January 1, 2020.
Étienne Bouas-Laurent, currently CEO of AXA Hong Kong, will become Deputy Chief Financial Officer and a
Member of AXA’s Management Committee on September 1, 2019, and Group Chief Financial Officer on January 1,
2020, when Gérald Harlin retires. Étienne joined the Group in 1997 and has held several financial and operational
roles throughout his career at AXA.
Alban de Mailly Nesle, Chief Risk Officer, Head of Insurance Office, and a Member of the Management Committee,
will become Chief Risk and Investment Officer, taking the additional responsibility of overseeing the Group
Investment Department, in addition to Group Risk Management and Ceded Reinsurance.
Georges Desvaux, previously Senior Partner at McKinsey & Company, is appointed Chief Strategy and Business
Development Officer of AXA and joins AXA’s Management Committee as of September 1, 2019.
Karima Silvent, Chief Human Resources Officer, is joining AXA’s Management Committee as of September 1, 2019.
Significant Disposals
AXA COMPLETED THE SALE OF ITS UKRAINIAN OPERATIONS
On February 14, 2019, AXA announced that it had completed the sale of both its non-life entity (AXA Insurance (1))
and life entity (AXA Insurance Life) in Ukraine to Fairfax Financial Holdings Limited (2).
TERMINATION OF THE SALE AGREEMENT RELATED TO AXA MBASK INSURANCE COMPANY IN AZERBAIJAN
On April 4, 2019, the agreement with Mr. Elkhan Garibli to sell AXA’s non-life entity in Azerbaijan (AXA MBask
Insurance Company OJSC), announced on February 21, 2018, lapsed.
AXA Mbask Insurance Company ceased underwriting new insurance business and will exclusively administer the
in-force portfolio with the purpose of terminating its insurance activities in Azerbaijan as soon as practicable,
while preserving the interest of its existing clients in Azerbaijan.
(1) AXA Insurance in Ukraine was a joint venture between AXA (50% shareholding) and Ukrsibbank. (2) Through its subsidiary FFHL Group Ltd.
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Partnerships and innovation
AXA EXPANDS ITS PAYER-TO-PARTNER STRATEGY IN EMERGING MARKETS THROUGH INNOVATIVE
HEALTHCARE DELIVERY SYSTEMS
On July 17, 2019, AXA announced the expansion of its Payer-to-Partner strategy in emerging markets. AXA is
creating a digital and physical health care ecosystem by launching its own medical centers, linked directly to its
health insurance services. By combining, in one offer, services that are normally delivered by different providers,
AXA aims to simplify the healthcare journey of its customers.
AXA’s target is to open up to 50 medical clinics which would serve as many as 1.5 million clients across emerging
markets by 2023, starting with Mexico in Latin America and Egypt in Africa, to be followed by other key emerging
markets.
These centers will provide access to advanced diagnostics, laboratory equipment and medical consultations in
key specialties, thereby bringing to its customers an affordable, high-quality and seamless patient experience, in
markets where access to economical and quality care still remains a challenge for many individuals and families.
In Mexico, AXA announced the launch of a joint venture with Keralty, to develop a vertically integrated health
system incorporating quality day-to-day healthcare delivery. Keralty is the leading health insurer and services
provider in Colombia, with significant presence in the United States and Brazil. Concurrently in Egypt, AXA will
open diagnostic centers and primary care centers, owned 100% by AXA, with the support of World Health
Management as its technical partner, with expertise in designing and setting up healthcare facilities.
These initiatives fully embody AXA’s strategy to provide healthcare solutions in emerging markets, where the
existing health system often results in high non-reimbursable medical care spending for the population.
Capital / Debt operations / Other
AXA RATINGS
On April 5, 2019, Moody’s Investors Service affirmed the “Aa3” insurance financial strength rating of AXA’s
principal insurance subsidiaries, changing the outlook to stable from negative.
On April 30, 2019, Fitch Ratings affirmed the financial strength rating of AXA’s core operating subsidiaries at “AA-
” with a stable outlook.
On July 24, 2019, S&P Global Ratings affirmed the long-term financial strength rating of AXA’s core operating
subsidiaries at “AA-” with a stable outlook.
AXA GROUP UNVEILED ITS NEW GLOBAL BRAND POSITIONING: "KNOW YOU CAN"
On February 1, 2019, AXA unveiled its new tagline, which will be rolled out across all its markets in the next year:
"Know you can". This positioning symbolizes AXA's new promise to its customers, that of being the encouraging
partner who helps them feel more confident to achieve their goals and go further. This new promise plays an
integral role in the deployment of AXA's strategic ambition to transition from payer to partner to its customers.
The new tagline will be deployed with a global campaign featuring one of history’s greatest tennis champions
Serena Williams. Embodying success and self-belief, this campaign symbolizes AXA's values and ambition. The
films with Serena Williams will be at the heart of a comprehensive communications campaign also featuring
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Liverpool Football Club players (1) and AXA's strategic business segments, Health, Protection and Commercial
lines insurance, and local market proofs illustrating the Group's commitment to its customers.
AXA ANNOUNCED THE SUCCESSFUL COMPLETION OF A SECONDARY COMMON STOCK OFFERING OF AXA
EQUITABLE HOLDINGS, INC. AND RELATED SHARE BUYBACK
On March 25, 2019, AXA announced that it had successfully completed a secondary public offering of 40,000,000
shares (the “Offering”), at a public offering price of USD 20.50 per share, of its U.S. subsidiary, AXA Equitable
Holdings, Inc. (“EQH”) and the sale to EQH of 30,000,000 shares (the “Share Buyback”) at the per share price paid
by the underwriters in the Offering. In addition, the underwriters exercised in full the over-allotment option to
purchase an additional 6,000,000 EQH shares.
Net proceeds (2) amounted to USD 1.5 billion or €1.3 billion (3), corresponding to the sale of 76,000,000 EQH shares
in the Offering, the full exercise of the over-allotment option granted to the underwriters, and the Share Buyback.
Following this sale, AXA’s ownership in EQH decreased from 60.1% (4)(5) to 48.3% (5).
Following the successful completion of the Offering and the Share Buyback, the retained non-controlling minority
stake in EQH has been deconsolidated and subsequently being accounted for using the equity method.
The Offering and the Share Buyback resulted in a negative net income impact of €-0.6 billion in AXA’s Half Year
2019 Financial Report. This impact reflects the difference between the Offering price and the consolidated book
value (6) of (i) the EQH shares sold in the transaction, and (ii) AXA’s remaining 48.3% (5) stake in EQH (i.e. the loss
required to be taken upon deconsolidation). This does not reflect Management’s expectations on the future
evolution of EQH’s share price or of the price at which potential future transactions might take place.
The transaction contributed to the reduction of AXA’s Debt Gearing (7) by 1.0 point (8).
For additional information on the accounting-related impacts of the Offering and Share Buyback, see Note 4.1 to
AXA’s Half Year 2019 Consolidated Financial Statements included in this report, available on our website
(www.axa.com).
AXA ANNOUNCED THE SUCCESSFUL COMPLETION OF A SECONDARY OFFERING OF AXA EQUITABLE
HOLDINGS, INC.’S COMMON STOCK
On June 7, 2019, AXA announced that it had successfully completed a secondary public offering of a further
40,000,000 shares of EQH’s common stock.
Net proceeds (2) to AXA, corresponding to the sale of 40,000,000 EQH shares, amounted to USD 834 million or €739
million (9)(10). Following this sale, AXA’s ownership in EQH decreased from 48.3% (5)(11) to 40.1% (5)(11). In addition, AXA
granted the underwriters a 30-day option to purchase up to an additional 6,000,000 EQH shares.
(1) AXA is the Global Insurance Partner of Liverpool Football Club. (2) Net of underwriting discounts and commissions. (3) EUR 1 = USD 1.1297 as of March 22, 2019 (Source: Bloomberg). (4) EQH’s issued and outstanding common stock as of March 7, 2019, was comprised of 521,051,204 shares. (5) Including the shares to be delivered on redemption of the bonds mandatorily exchangeable into EQH shares, issued by AXA in May 2018. (6) Including the recycling of related currency translation adjustment, and other comprehensive income. (7) Following the deconsolidation of AXA Equitable Holdings Inc. and its subsequent accounting under the equity method, the Mandatory
Exchangeable Bonds (“MEB”) issued by AXA in May 2018 were excluded from the Debt Gearing. Debt Gearing is an alternative performance measure and is defined in the Glossary set forth on pages 69 to 76 of this report. (8)This reflects the effect of the deconsolidation of EQH but does not reflect the intended use of the proceeds to reduce of AXA’s Debt Gearing towards
the targeted range of 25%-28% by 2020. (9) EUR 1 = USD 1.1293 as of June 6, 2019 (Source: Bloomberg). (10) Not including the proceeds from the potential exercise of the 30-day over-allotment option granted to the underwriters to purchase 6,000,000
EQH shares. (11) EQH’s issued and outstanding common stock as of May 9, 2019, comprised 491,138,042 shares.
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Risk Factors
The principal risks and uncertainties faced by the Group are described in detail in Section 4.1 "Risk Factors" and
Section 6.3 “General Information” of the 2018 Registration Document (respectively on pages 164 to 180 and pages
385 to 393). The 2018 Registration Document was filed with the Autorité des marchés financiers (the “AMF”) and
is available on the AMF’s website (www.amf-france.org) as well as on AXA's website (www.axa.com).
The descriptions contained in these sections of the 2018 Registration Document remain valid in all material
respects at the date of the publication of this report regarding the appreciation of the major risks and
uncertainties affecting the Group on June 30, 2019, or which Management expects could affect the Group during
the remainder of 2019.
Related-Party Transactions
During the first semester of 2019, there were (1) no modifications to the related-party transactions described in
Note 28 "Related-party transactions" of the audited consolidated financial statements for the fiscal year ended
December 31, 2018, included in the 2018 Registration Document (pages 360 and 361) filed with AMF and available
on its website (www.amf-france.org) as well as on the Company's website www.axa.com, which significantly
influenced the financial position or the results of the Company during the first six months of the fiscal year 2019,
and (2) no new transaction concluded between AXA SA and related parties that significantly influenced the
financial position or the results of the Company during the first six months of 2019.
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Events subsequent to June 30, 2019
AXA S.A. ANNOUNCED THE FULL EXERCISE OF THE OVER-ALLOTMENT OPTION RELATED TO THE RECENTLY
COMPLETED SECONDARY OFFERING OF AXA EQUITABLE HOLDINGS, INC.’S COMMON STOCK
On July 8, 2019, AXA announced that the underwriters in the secondary offering of shares of common stock (the
“Offering”) of EQH, completed on June 7, 2019, have fully exercised their option to purchase an additional
6,000,000 shares of EQH’s common stock from AXA, subject to the same terms and conditions as the Offering.
Net proceeds (1) to AXA from the exercise of the underwriters’ option amounts to USD 125 million or €112 million (2), corresponding to a net price (1) of USD 20.85 per share. Following the sale of these additional shares, AXA’s
ownership in EQH has decreased from 40.1% (3)(4) to 38.9% (3)(4).
(1) Net of underwriting discounts and commissions. (2) EUR 1 = USD 1.1219 as of July 5, 2019 (Source: Bloomberg). (3) EQH’s issued and outstanding common stock as of May 9, 2019 comprised 491,138,042 shares. (4) Including the shares to be delivered on redemption of the bonds mandatorily exchangeable into EQH shares, issued by AXA in May 2018.
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Activity and Earnings Indicators
On March 25, 2019, AXA completed a further sell down of its shareholding in EQH, bringing AXA’s ownership in EQH
from 60.1% to 48.3%. The reduction of its voting rights below 50% combined with the reduction of its board
membership to a minority share led to the loss of control of AXA over EQH, while continuing to retain a significant
influence over its residual shareholding of EQH. As a result, AXA:
deconsolidated EQH and recorded a negative net income impact of €0.6 billion (including the recycling
of related other comprehensive income and currency translation reserve) corresponding to the
difference between the fair value and the consolidated carrying value of EQH at the date of the
deconsolidation;
accounted for its remaining ownership in EQH using the equity method;
reclassified the equity component of the Mandatory Exchangeable Bonds (‘MEB’) from non-controlling
interests to financial liability.
As a consequence, in this report, the United States Gross revenues contribution included 3 months of operations.
Nevertheless, the United States contribution for APE and NBV included 6 months of operations on Group share
basis.
Furthermore, the United States underlying earnings contribution in 1H19 was fully accounted for in Income from
affiliates and associates, and was therefore excluded from Health and Protection Combined Ratio in 1H19.
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ACTIVITY INDICATORS
(in Euro million, except percentages) June 30, 2019 June 30, 2018
restated (a)
June 30, 2019 /
June 30, 2018
restated (a) & (b)
December 31, 2018
Gross revenues (c) 57,949 53,600 4.0% 102,874
France 13,383 13,004 3.1% 25,175
Europe 19,978 21,747 2.2% 36,738
Asia 4,827 4,339 5.2% 8,973
AXA XL 10,436 1,755 8.7% 6,287
United States 4,297 7,923 4.8% 16,483
International 3,662 3,419 5.7% 6,535
Transversal & Central Holdings 1,367 1,413 (2.1%) 2,684
APE (d) 3,227 3,387 1.8% 6,631
France 1,052 1,041 (4.6%) 2,232
Europe 655 640 2.1% 1,146
Asia 867 763 8.2% 1,520
United States 524 821 5.5% 1,471
International 129 123 3.4% 262
NBV Margin (e) 40.4% 38.8% (0.1 pts) 39.3%
(a) Restated: as per new governance.
(b) Changes are on comparable basis.
(c) Net of intercompany eliminations.
(d) Annual Premium Equivalent (APE) represents 100% of new regular premiums plus 10% of single premiums, in line with EEV methodology. APE is Group share.
(e) New Business Value (NBV) Margin is the ratio of (i) New Business Value representing the value of newly issued contracts during the current year to (ii) APE.
Consolidated Gross revenues amounted to €57,949 million as of June 30, 2019, up 8.1% on a reported basis and
up 4.0% on a comparable basis compared to June 30, 2018.
The 1H18 comparable basis mainly includes the following adjustments: (i) the inclusion of XL Group contribution
in 2018 (€+7.3 billion or -13.4 points), (ii) the exclusion of the 2Q18 United States contribution following the
deconsolidation of AXA Equitable Holdings Inc. and its subsequent accounting under the equity method (€-4.1
billion or +7.5 points), and (iii) the exclusion of the savings portion of the 1H18 premiums related to the
transformed in-force Group Life business in Switzerland (€-2.5 billion or +4.5 points).
The 1H19 comparable basis includes the foreign exchange rate movements mainly due to the depreciation of
average Euro exchange rate against major currencies (€-1.3 billion or +2.4 points).
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Gross revenues
Gross revenues were up 8% on a reported basis and up 4% on a comparable basis to €57,949 million.
France gross revenues were up 3% (€+404 million) on a comparable basis to €13,383 million:
Life & Savings (€+270 million or +4%) to €7,086 million mainly driven by Individual Savings (€+144 million)
due to G/A strong sales of capital light products sold through the bancassurance channel and higher sales
of Eurocroissance products sold through the proprietary channel, partly offset by lower Unit-Linked
revenues, as well as Protection (€+53 million) and Group Savings (€+47 million) driven by higher sales in
both domestic and international markets;
Property & Casualty (€-9 million or 0%) to €3,922 million mainly driven by Personal lines (€-16 million) due
to lower volumes in Motor, partly offset by Commercial lines (€+7 million) supported by tariff and volume
increases mainly in Motor, Property and Construction, partly offset by continued selectivity in the Credit
and Lifestyle Protection business;
Health (€+129 million or +6%) to €2,312 million mainly driven by higher volumes in Group business (€+112
million) in both international and domestic markets as well as in Individual business (€+17 million);
Other (€+14 million or +28%) to €64 million driven by AXA Banque France mainly from a higher interest
margin.
Europe gross revenues were up 2% (or €+411 million) on a comparable basis to €19,978 million:
Switzerland (€-26 million or -1%) to €4,881 million from (i) Life & Savings in the context of the
transformation of the in-force Group Life business model to a semi-autonomous model, partly offset by
(ii) Property & Casualty driven by Commercial lines due to higher volumes and tariff increases in Workers’
Compensation;
Germany (€+66 million or +1%) to €6,088 million from (i) Property & Casualty driven by Commercial Non-
Motor due to new business in Mid-Market and SMEs as well as from a favorable impact of renewals, and
(ii) Health mainly due to the continued growth in the civil servants segment and tariff increases in full
benefit insurance, partly offset by (iii) Life & Savings mainly in Protection with Savings and traditional G/A
Savings reflecting the decrease in the legacy business, in line with the strategy, and Unit-Linked single
premium, partly offset by higher new business in G/A capital light products and Pure Protection following
the launch of a new disability product;
Belgium (€+40 million or +2%) to €1,794 million primarily from Property & Casualty driven by Commercial
lines in Mid-Market segments, notably in the Public sector and SMEs, driven by new business and tariff
increases;
The United Kingdom & Ireland (€+77 million or +3%) to €2,856 million mainly from (i) Property & Casualty
mainly in Motor reflecting higher new business in Personal lines as well as tariff increases and higher new
business in Commercial lines, and in Property mainly due to higher new business, and (ii) Health mainly
driven by a new partnership in international business;
Spain (€+86 million or +7%) to €1,370 million from (i) Life & Savings driven by strong sales in Protection,
G/A Savings and Unit-Linked, as well as (ii) Property & Casualty and Health both driven by higher volumes
and tariff increases;
Italy (€+169 million or +6%) to €2,989 million mainly from (i) Life & Savings mainly driven by the sales of
Protected UL products in Unit-Linked and hybrid products in G/A Savings, and (ii) Property & Casualty
driven by higher new business and renewals in Motor and Property.
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Asia gross revenues were up 5% (or €+223 million) on a comparable basis to €4,827 million mainly from:
Japan (€-27 million or -1%) to €2,414 million from (i) Life & Savings mainly due to G/A Savings and Unit-
Linked due to continued lower new business from the G/A capital light Single Premium Whole Life product,
partly offset by Protection with Savings mainly from in-force growth on regular premiums, partly offset
by (ii) Health mainly from Medical Whole Life products, notably due to the success of Medical Care
products, partly offset by lower new business from Medical Term products;
Hong Kong (€+234 million or +16%) to €1,830 million from (i) Life & Savings mainly in Protection with
Savings driven by in-force growth and higher new business in brokers and agency channels, Unit-Linked
driven by growth in single premium new business, and G/A Savings driven by in-force growth, (ii) Health
mainly driven by higher volumes in Individual business and tariff increases in Group business, and (iii)
Property & Casualty mainly due to higher volumes in both Personal and Commercial lines, and tariff
increases in Commercial lines;
Asia-Direct (€+23 million or +5%) to €507 million from (i) South Korea (€+14 million or +6%) in Personal
Motor following the improvement of digital channel, quotation and conversion ratio, and Personal Non-
Motor from higher new business, combined with (ii) Japan (€+8 million or +4%) mainly driven by higher
new business in Personal Motor.
AXA XL gross revenues were up 9% (or €+802 million) on a comparable basis to €10,436 million:
Property & Casualty Insurance (€+616 million or +15%) to €4,961 million driven by both volume growth
and rate increases across most lines of business, notably in North America Professional, including a new
significant multi-year contract sold in the first quarter, and in Property;
Property & Casualty Reinsurance (€+50 million or +2%) to €2,748 million driven by both volume growth
and rate increases in Specialty and Other lines mainly from Lloyds Whole accounts, North America
Agriculture and North America Accident & Health, partly offset by lower premiums in Property Cat
reflecting a reduced Nat Cat exposure;
Property & Casualty Specialty (€+137 million or +6%) to €2,632 million driven by both volume growth and
rate increases across most lines of business, notably in Political Risks, as well as in Accident & Health and
Fine Art & Specie.
The United States gross revenues were up 5% (or €+184 million) on a comparable basis to €4,297 million in
1Q19:
The United States Life & Savings (€+225 million or +7%) to €3,643 million in 1Q19 mainly in Unit-Linked
from higher sales of non-GMxB Variable Annuity, partly offset by lower revenues from GMxB Variable
Annuity;
AB (€-42 million or -6%) to €654 million in 1Q19 mainly from both lower research service and
management fees as a result of adverse market conditions in 4Q18.
International gross revenues were up 6% (or €+196 million) on a comparable basis to €3,662 million mainly
from:
Mexico (€+105 million or +12%) to €1,008 million from (i) Health driven by volume growth and tariff
increases, and (ii) Property & Casualty driven by a positive timing impact and new business in Commercial
Property;
The Gulf Region (€-4 million or -1%) to €471 million mainly from (i) Property & Casualty driven by a further
reduction of the size of a large Commercial Motor fleet, partly offset by volume growth and tariff increases,
partly offset by (ii) Health driven by volume growth and tariff increases;
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Colombia (€+33 million or +10%) to €354 million mainly from (i) Property & Casualty driven by new
business in Protection and Workers’ Compensation, partly offset by (ii) Life & Savings mainly driven by a
G/A Savings run-off portfolio;
Singapore (€+10 million or +3%) to €318 million primarily from Life & Savings driven by higher sales across
all lines of business;
Turkey (€+67 million or +22%) to €288 million primarily from Property & Casualty mainly in Motor and
Commercial Property;
Poland (€-19 million or -6%) to €288 million notably from (i) Property & Casualty due to lower sales in
Personal Motor in line with softening market trends, and (ii) Life & Savings driven by lower sales in Unit-
Linked, partly offset by higher sales in Protection;
Morocco (€+22 million or +11%) to €243 million mainly from (i) Property & Casualty driven by new business
in Personal Motor and Commercial Property, and (ii) Life & Savings driven by higher sales in G/A Savings;
Malaysia (€-16 million or -10%) to €143 million from Property & Casualty mainly due to lower sales in Motor
reflecting strong market competition.
Transversal gross revenues were down 2% (or €-30 million) on a comparable basis to €1,367 million mainly
from:
AXA Assistance (€+26 million or +4%) to €687 million from (i) Health mainly driven by higher new business,
and (ii) Property & Casualty from Non-Motor driven by higher volumes mainly in Travel and Home, partly
offset by lower volumes in Motor;
AXA Investment Managers (€-48 million or -8%) to €587 million mainly driven by lower performance fees,
management fees and transaction fees.
New business Annual Premium Equivalent (1)
New business APE was down 5% on a reported basis and up 2% on a comparable basis to €3,227 million driven
by growth in Asia, the United States, Europe, and International.
France (€1,052 million, 33% of total) down €51 million (-5%) on a comparable basis mainly stemming from
Group Health (€-111 million) due to the non-repeat of exceptional sales in Group International business, partly
offset by Savings (€+35 million) and Protection (€+23 million) mainly reflecting higher sales of mortgage insurance
products.
Europe (€665 million, 20% of total) up €14 million (+2%) on a comparable basis in (i) Germany (€+15 million)
driven by higher new business in G/A capital light products, Pure Protection following the launch of a new disability
product as well as Health both in private and civil servants segments, (ii) Belgium (€+11 million) mainly driven by
Unit-Linked due to a large Group pension contract, (iii) Spain (€+10 million) driven by Protection, G/A Savings and
Unit-Linked, and (iv) Italy (€+8 million) mainly from hybrid products, partly offset by (v) Switzerland (€-29 million)
in the context of the transformation of the in-force Group Life business, partly offset by higher new business in
Individual Life.
Asia (€867 million, 27% of total) up €63 million (+8%) on a comparable basis in (i) China (€+70 million) due to
strong sales of G/A Savings products during the Chinese New Year, and (ii) Hong Kong (€+46 million) driven by
strong sales in Protection with Savings, partly offset by lower sales in G/A Savings and Group Health, partly offset
by (iii) Japan (€-26 million) mainly due to lower new business in Protection with Savings following the
(1) New business Annual Premium Equivalent (APE) represents 100% of new regular premiums plus 10% of single premiums, in line with EEV
methodology. APE is Group share.
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announcement of a tax rule change as well as the decrease of the G/A capital light Single Premium Whole Life
product, partly offset by a growth in Health, (iv) Thailand (€-20 million) driven by Protection with Savings due to
lower sales of low margin products combined with lower sales of Unit-Linked products, (v) Indonesia (€-5 million)
mainly driven by lower new business in Protection with Savings in both telemarketing and bancassurance
channels, partly offset by successful sales of a newly launched Health product, and (vi) the Philippines (€-2 million)
from Protection with Savings due to lower sales in bancassurance channel.
The United States (€524 million, 16% of total) up €25 million (+5%) on a comparable basis mostly driven by
higher sales of non-GMxB Variable Annuity, partly offset by lower sales of GMxB Variable Annuity and lower advisory
sales in Mutual Funds.
International (€129 million, 4% of total) up €4 million (+3%) on a comparable basis mainly in (i) India (€+2
million) from higher sales in Protection with Savings, (ii) Singapore (€+2 million) mainly driven by higher sales in
both G/A Savings and Unit-Linked, and (iii) Mexico (€+1 million) reflecting growth in Protection with Savings.
New Business Value Margin (1)
New Business Value Margin stood at 40.4%, increasing by 1.5 points. On a comparable basis, restated mainly for
the decrease in AXA ownership in EQH, New Business Value Margin decreased by 0.1 point mainly driven by strong
volumes of low-margin G/A Savings products in China during the Chinese New Year, partly offset by a favorable
business mix from Protection to Health products in Japan.
(1) New Business Value (NBV) Margin is the ratio of (i) New Business Value representing the value of newly issued contracts during the current year
to (ii) APE.
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UNDERLYING EARNINGS, ADJUSTED EARNINGS AND NET INCOME GROUP SHARE
June 30, 2019
(in Euro million, except percentages) June 30,
2019 (a) France Europe Asia AXA XL
United
States (a) International
Transversal
& Central
Holdings
Investment margin 2,487 837 882 22 503 199 44
Fees & revenues 2,958 1,122 589 1,070 - 172 6
Net technical margin 9,041 1,582 3,396 442 2,428 813 379
Expenses (9,917) (2,403) (3,104) (852) (2,281) (923) (355)
Amortization of value of purchased life business in-force (32) - (23) (7) - (1) -
Underlying earnings before tax from insurance activities 4,537 1,138 1,739 674 651 260 75
Underlying earnings before tax from other activities (380) 1 49 (8) (48) 31 (406)
Income tax expenses / benefits (879) (269) (407) (133) (100) (61) 91
Income from affiliates and associates 433 5 - 91 1 283 41 11
Minority interests (91) (2) (48) (4) (2) (32) (3)
Underlying earnings Group share 3,620 873 1,333 620 502 283 240 (232)
Net capital gains or losses attributable to shareholders net of
income tax 386 68 231 10 45 (3) (2) 35
Adjusted earnings Group share 4,006 941 1,565 631 547 280 238 (196)
Profit or loss on financial assets (under fair value option) and
derivatives (767) (60) (278) 2 (6) 4 8 (438)
Exceptional operations (including discontinued operations) (705) (4) (36) - (45) (22) - (597)
Goodwill and other related intangible impacts (59) - (18) (8) (20) (0) (12) (0)
Integration and restructuring costs (142) (6) (25) (1) (82) (5) (2) (22)
NET INCOME GROUP SHARE 2,333 872 1,207 625 394 257 232 (1,254)
Property & Casualty Combined Ratio 95.1% 90.8% 92.8% 95.4% 98.3% 98.4% 95.7%
Health Combined Ratio 93.9% 97.7% 95.4% 77.5% - 98.6% 100.6%
Protection Combined Ratio 93.2% 97.8% 95.2% 86.3% 104.3% 98.7% -
(a) Following the deconsolidation of AXA Equitable Holdings, Inc. and its subsequent accounting under the equity method, the United States underlying earnings contribution was fully accounted for in Income from
affiliates and associates, and therefore excluded from Health and Protection Combined Ratio.
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Half Year 2019 Financial Report
June 30, 2018
(in Euro million, except percentages) June 30,
2018 France Europe Asia AXA XL
United
States International
Transversal
& Central
Holdings
Investment margin 2,341 825 920 19 103 256 189 30
Fees & revenues 4,101 966 573 991 - 1,394 171 7
Net technical margin 6,306 1,488 3,138 407 269 (123) 726 400
Expenses (8,430) (2,149) (2,962) (812) (261) (1,029) (880) (336)
Amortization of value of purchased life business in-force (34) - (21) (11) - (0) (1) -
Underlying earnings before tax from insurance activities 4,284 1,130 1,648 594 111 497 205 99
Underlying earnings before tax from other activities 36 0 40 (2) - 252 26 (281)
Income tax expenses / benefits (938) (325) (380) (112) (33) (136) (43) 90
Income from affiliates and associates 139 14 1 67 - - 47 10
Minority interests (223) (2) (39) (4) (1) (149) (25) (4)
Underlying earnings Group share 3,298 816 1,271 544 77 465 210 (84)
Net capital gains or losses attributable to shareholders net of
income tax 330 76 231 (8) 28 3 (1) 1
Adjusted earnings Group share 3,628 892 1,502 536 105 467 209 (84)
Profit or loss on financial assets (under fair value option) and
derivatives (346) (68) (65) (22) (27) (59) 14 (120)
Exceptional operations (including discontinued operations) (361) 48 (340) (6) (4) (19) (20) (20)
Goodwill and other related intangible impacts (36) - (19) (8) - (0) (8) (0)
Integration and restructuring costs (89) (9) (24) (13) - (27) (5) (12)
NET INCOME GROUP SHARE 2,796 863 1,054 487 75 363 190 (236)
Property & Casualty Combined Ratio 95.0% 93.7% 93.9% 96.5% 99.4% - 100.1% 89.9%
Health Combined Ratio 94.9% 98.7% 96.2% 77.7% - 150.1% 99.3% 102.1%
Protection Combined Ratio 96.2% 94.7% 97.6% 86.0% - 108.3% 100.2% -
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Half Year 2019 Financial Report
December 31, 2018
(in Euro million, except percentages) December 31,
2018 France Europe Asia AXA XL United States International
Transversal
& Central
Holdings
Investment margin 4,864 1,604 1,759 40 349 641 410 62
Fees & revenues 8,434 2,105 1,165 2,009 - 2,781 361 13
Net technical margin 12,990 3,034 6,374 793 944 (385) 1,421 810
Expenses (17,686) (4,430) (6,015) (1,653) (1,462) (1,635) (1,792) (699)
Amortization of value of purchased life business in-force (55) - (23) (29) - (1) (3) -
Underlying earnings before tax from insurance activities 8,547 2,313 3,260 1,159 (168) 1,400 397 186
Underlying earnings before tax from other activities (43) (0) 108 (3) (10) 496 39 (673)
Income tax expenses / benefits (2,004) (755) (755) (219) (70) (272) (92) 159
Income from affiliates and associates 315 20 2 171 (3) - 104 20
Minority interests (632) (5) (84) (7) 18 (500) (47) (8)
Underlying earnings Group share 6,182 1,573 2,532 1,101 (233) 1,125 400 (316)
Net capital gains or losses attributable to shareholders net of
income tax 307 131 266 (34) (27) (11) (4) (13)
Adjusted earnings Group share 6,489 1,704 2,797 1,067 (260) 1,114 396 (330)
Profit or loss on financial assets (under fair value option) and
derivatives (463) (91) (134) (53) (63) (82) 39 (79)
Exceptional operations (including discontinued operations) (451) 40 (376) 4 (29) 16 (17) (91)
Goodwill and other related intangible impacts (3,102) - (39) (18) (10) (3,006) (29) (1)
Integration and restructuring costs (332) (19) (107) (13) (67) (27) (35) (64)
NET INCOME GROUP SHARE 2,140 1,635 2,141 987 (428) (1,986) 355 (564)
Property & Casualty Combined Ratio 97.0% 92.3% 94.5% 97.1% 108.6% - 100.6% 89.9%
Health Combined Ratio 94.4% 97.9% 94.8% 78.8% - 169.6% 99.6% 110.4%
Protection Combined Ratio 95.6% 95.0% 96.7% 86.8% 89.2% 106.2% 98.8% -
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ALTERNATIVE PERFORMANCE MEASURES
Adjusted Earnings, Underlying Earnings, Adjusted Return on Equity, Underlying Earnings per share, Underlying
Combined Ratio and Debt Gearing are Alternative Performance Measures (“APMs”) as defined in ESMA’s
guidelines and the AMF’s related position statement issued in 2015. A reconciliation from Adjusted Earnings,
Underlying Earnings and Underlying Combined Ratio to the most directly reconcilable line item, subtotal or
total in the financial statements of the corresponding period is provided in the above tables. Adjusted Return
on Equity and Underlying Earnings per share are reconciled to the financial statements in the table set forth
on page 30 of this report, and Debt Gearing is reconciled to the financial statements in the table set forth on
page 29 of this report. For further information on any of the above-mentioned APMs, see the Glossary set forth
on pages 69 to 76 of this report.
Adjusted Earnings
Adjusted Earnings represent the net income (Group share) as disclosed in the above tables, before the impact
of the following items net of policyholder participation, deferred acquisition costs, VBI, taxes and minority
interests:
integration and restructuring costs related to material newly-acquired companies as well as
restructuring and associated costs related to productivity improvement plans;
goodwill and other related intangibles;
exceptional operations (primarily changes in scope and discontinued operations);
profit or loss on financial assets accounted for under fair value option (excluding assets backing
liabilities for which the financial risk is borne by the policyholder), foreign exchange impacts on assets
and liabilities, and derivatives related to invested assets and liabilities.
Underlying Earnings
Underlying Earnings correspond to Adjusted Earnings without the following elements, net of policyholder
participation, deferred acquisition costs, VBI, taxes and minority interests:
realized gains and losses and change in impairment valuation allowance (on assets not designated
under fair value option or trading assets); and
cost at inception, intrinsic value and pay-off of derivatives used for the economic hedging of realized
gains and impairments of equity securities backing General Account and shareholders’ funds.
Adjusted Return on Equity
The Adjusted Return on Equity (“Adjusted RoE”) is calculated as adjusted earnings net of financial charges
related to undated subordinated debt, preferred shares and mandatory exchangeable bonds up to the date
of deconsolidation of EQH and its subsequent accounting under equity method (recorded through
shareholders’ equity as disclosed in Part 2.4 - “Consolidated statement of changes in equity” and financial
debt as disclosed in Part 2.6 - Note 7 “Financing debt” of this report) divided by the weighted average
shareholders’ equity. The weighted average shareholders’ equity:
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Half Year 2019 Financial Report
is based on opening shareholders’ equity adjusted for weighted average impacts of capital flows
(including dividends);
without reserves relating to change in fair value through shareholders’ equity as disclosed in Part 2.4
“Consolidated statement of changes in equity” of this report;
without undated subordinated debt as disclosed in Part 2.4 “Consolidated statement of changes in
equity” of this report.
Underlying Earnings per share
Underlying Earnings per share corresponds to Underlying Earnings (net of financial charges related to
undated subordinated debts recorded through shareholders’ equity - Group share, and preferred shares and
mandatory exchangeable bonds recorded through shareholders’ equity - Minority interests as disclosed in
Part 2.4 - “Consolidated statement of changes in equity” and financial debt as disclosed in Part 2.6 - Note 7
“Financing debt” of the Financial Report), divided by the weighted average number of outstanding ordinary
shares.
Underlying Combined Ratio (applicable for Property & Casualty, Health and Protection)
The Underlying Combined Ratio is the sum of the all accident year loss ratio and the underlying expense
ratio.
All accident year loss ratio net of reinsurance is the ratio of:
o all accident years claims charge gross of reinsurance + claims handling costs + result of
reinsurance ceded on all accident years excluding unwind of the discount rate used in
calculating technical reserves; to
o earned revenues gross of reinsurance.
Underlying expense ratio is the ratio of:
o underlying expenses (excluding claims handling costs, including changes in VBI amortization);
to
o earned revenues gross of reinsurance.
Debt Gearing
Debt Gearing refers to the level of a company's debt related to its equity capital, usually expressed as a
percentage. Debt Gearing is used by Management to measure the financial leverage of the Group and the
extent to which its operations are funded by creditors as opposed to shareholders. AXA’s Debt Gearing is
calculated by dividing the gross debt (financing debt as disclosed in Part 2.6 - Note 7 “Financing debt” and
undated subordinated debt as disclosed in Note 6 “Shareholders’ equity and minority interests” of this report)
by total capital employed (shareholders’ equity excluding undated subordinated debt and reserves relating
to the change in the fair value of financial instruments and of hedge accounting derivatives plus gross debt).
Furthermore, following the deconsolidation of EQH and its subsequent accounting under the equity method,
mandatory exchangeable bonds issued by AXA in May 2018 were excluded from the Debt Gearing.
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COMMENTARY ON GROUP EARNINGS
Underlying earnings
Underlying earnings amounted to €3,620 million, up €322 million (+10%) versus 1H18 on a reported basis. On
a constant exchange rate basis, underlying earnings increased by €229 million (+7%) driven by the increase
of underlying earnings from France, Europe, Asia, International and Transversal activities (€+156 million or 5%
of total growth), and the contribution (€+73 million or 2% of total growth) from AXA XL, the United States and
Central Holdings mainly from a temporary increase in financial charges in the context of the acquisition of XL
Group and the IPO and subsequent Secondary Offering of AXA Equitable Holdings, Inc.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, underlying
earnings before tax from insurance activities increased by €154 million (+4%) to €3,886 million.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States,
investment margin remained stable (€+2 million or 0%) driven by (i) International (€+16 million)
mainly from Mexico (€+12 million) from a higher investment margin as a result of a higher average
asset base, (ii) Transversal & Central Holdings (€+15 million) from AXA Liabilities Managers (€+15
million) due to an exceptional dividends distribution, and (iii) France (€+13 million) mainly from lower
profit-sharing, partly offset by (iv) Europe (€-44 million) due to lower distribution from investment
funds combined with lower reinvestment yields as well as a decrease in the asset base in Switzerland
following the transformation of the in-force Group Life business model to a semi-autonomous model
(€-25 million).
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States,
fees & revenues increased by €179 million (+7%) due to (i) France (€+155 million) mainly due to the
non-repeat of the update of Unearned Revenue Reserve assumptions on G/A Savings and Unit-Linked
(more than offset in Deferred Acquisition Costs), as well as higher loadings on premiums in Protection,
(ii) Asia (€+16 million) mainly in Japan (€+12 million) due to in-force growth in Protection with Savings,
and (iii) Switzerland (€+5 million) due to asset management fees paid by the foundations, partly offset
by lower loadings on premium following the transformation of the in-force Group Life business model
to a semi-autonomous model.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, net
technical margin increased by €397 million (+6%) driven by (i) Europe (€+228 million) from Property
& Casualty (€+209 million) due to an improved current year loss ratio (-1.4 points) driven by lower
attritional losses (-0.5 point) in Germany, Spain and Italy, and lower Nat Cat charges (-0.4 point) across
geographies except in Belgium, partly offset by less favorable prior year reserve developments (+0.2
point) mainly in Switzerland, Health (€+38 million) due to an improved loss ratio in the United Kingdom
& Ireland (-1.5 points) driven by an improved claims management and efficiency measures and in
Germany (-0.7 point), partly offset by Life & Savings (€-19 million) mainly in Switzerland (€-17 million)
due to the impact of the transformation of the in-force Group Life business model to a semi-
autonomous model and the non-repeat of an exceptional release of reserves in Individual Life
business, (ii) France (€+94 million) mainly from Property & Casualty (€+125 million) primarily driven by
lower Nat Cat charges, lower attritional losses and higher favorable prior year reserve developments,
and Health (€+12 million) mainly due to higher favorable prior year reserve developments in Group
Health, partly offset by Life & Savings (€-43 million) mainly from lower prior year reserve
developments, and (iii) International (€+84 million) primarily from Property & Casualty (€+66 million)
driven by Colombia (€+22 million) stemming from an improved net technical margin in Workers’
Compensation, Turkey (€+20 million) due to lower unfavorable prior year reserve developments, and
Brazil (€+15 million) due to a more favorable claims experience, and Health (€+10 million) driven by
Mexico (€+10 million) due to volume effects.
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On a constant exchange rate and excluding the contribution of AXA XL and the United States, expenses
increased by €425 million (+6%) primarily in (i) France (€-254 million) stemming from higher
acquisition expenses mainly driven by the impact of the non-repeat of an assumptions update on
Deferred Acquisition Costs on G/A Savings and Unit-Linked (partly offset in Unearned Revenue
Reserve) and higher commissions, (ii) Europe (€-119 million) mainly from Germany (€-71 million) due
to the inclusion of Roland expenses following the consolidation starting from October 1, 2018, the
United Kingdom & Ireland (€-17 million) from commissions in Ireland due to a higher share of
Commercial lines as well as business growth, and Spain (€-13 million) in line with volume growth, (iii)
International (€-41 million) mainly reflecting volume growth in Turkey (€-15 million), Colombia (€-13
million), and Mexico (€-11 million), and (iv) Transversal & Central Holdings (€-18 million) mainly at AXA
Assistance (€-23 million) driven by higher commissions from a change in business mix towards large
partnerships, notably in Home.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, VBI
amortization increased by €3 million (+8%) driven by (i) Asia (€+5 million) in Hong Kong (€+3 million)
and Japan (€+2 million), partly offset by (ii) Europe (€-2 million) in Germany (€-2 million).
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, underlying
earnings before tax from other activities decreased by €116 million to €-333 million mainly driven by
Transversal & Central Holdings (€-125 million or -45%) mainly at AXA SA (€-88 million) due to temporary higher
financial charges, notably in the context of the acquisition of XL Group, the treatment of the mandatory
exchangeable bonds following the deconsolidation of AXA Equitable Holdings, Inc. (“EQH”) and hedges
protecting the value of EQH, and AXA Investment Managers (€-22 million) due to lower gross revenues partly
offset by lower expenses.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, income tax
expenses decreased by €2 million (0%) to €-778 million as the impact of the increase in pre-tax underlying
earnings across geographies and the higher tax paid related to the timing of dividends received from
subsidiaries at AXA SA (€-31 million) were more than offset by higher dividend distributions on investments
funds benefiting from a lower taxation in France.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, income
from affiliates & associates increased by €8 million (+6%) to €149 million mainly driven by China (€+9 million)
due to favorable tax impacts supported by a regulatory change.
On a constant exchange rate basis and excluding the contribution of AXA XL and the United States, minority
interests increased by €15 million (+20%) to €-89 million driven by (i) Europe (€+9 million) mainly from Italy
(€+7 million) as a result of the increase of AXA MPS underlying earnings, and (ii) International (€+7 million) from
the Gulf Region and Colombia.
On a constant exchange rate basis, the Property & Casualty Combined Ratio increased by 0.1 point to 95.1%.
On a constant exchange rate basis and excluding the contribution of AXA XL, the Property & Casualty
Combined Ratio improved by 1.2 points to 93.3% driven by an improved loss ratio (-1.7 points) mainly from
lower attritional losses (-0.9 point) and lower Nat Cat charges (-0.8 point), partly offset by a higher expense
ratio driven by France due to higher administrative costs notably to further enhance customer service.
On a constant exchange rate basis, the Health Combined Ratio improved by 0.7 point to 93.9% mainly driven
by France (-1.0 point) due to volume effect from Group Health, and the United Kingdom & Ireland (-2.2 points)
due to an improved claims experience and efficiency measures.
On a constant exchange rate basis, the Protection Combined Ratio improved by 2.8 points to 93.2%. On a
constant exchange rate basis and excluding the 1H18 contribution of the United States, the Protection
Combined Ratio improved by 1.1 points mainly from Switzerland (-4.1 points) driven by the transformation of
the in-force Group Life business to a semi-autonomous model.
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Adjusted earnings to Net income
Net realized capital gains and losses attributable to shareholders amounted to €386 million. On a constant
exchange rate basis, net realized capital gains and losses attributable to shareholders increased by €52
million due to:
€+35 million lower impairments to €-42 million mainly driven by alternative investments (€+11
million to €-15 million), real estate (€+10 million to €4 million), equity securities (€+8 million to €-28
million), as well as fixed income assets (€+7 million to €-2 million);
€+21 million favorable change in intrinsic value to €-20 million related to equity hedging
derivatives;
€-4 million lower net realized capital gains to €448 million mainly driven by equity securities (€-156
million to €163 million), partly offset by real estate (€+90 million to €191 million) mainly from an
exceptional real estate sale in Belgium, alternative investments (€+33 million to €69 million), and fixed
income assets (€+29 million to €25 million).
As a result, adjusted earnings amounted to €4,006 million, up €378 million (+10%). On a constant exchange
rate basis, adjusted earnings increased by €281 million (+8%).
Net income amounted to €2,333 million, down €463 million (-17%). On a constant exchange rate basis, net
income decreased by €543 million (-19%) due to:
higher adjusted earnings (€+281 million);
a positive change in the fair value of assets accounted for under fair value option, up €131 million
to €22 million, driven by the decrease of interest rates and the strong recovery of the equity market
in the first semester of 2019;
more than offset by:
a more unfavorable change in the fair value of derivatives net of foreign exchange impacts, down
€547 million to €-789 million driven by:
o the change in the fair value of equity, interest rates and credit derivatives not eligible for
hedge accounting under IAS 39, down €462 million to €-709 million, mainly driven by equity
hedging derivatives (€-279 million) in a context of strong equity market recovery in the first
semester of 2019 and the impact of the decrease in interest rates on swaps hedging the
financial debt (€-196 million),
o the change in the fair value of foreign exchange derivatives not eligible for hedge accounting
under IAS 39 net of foreign exchange rate movements on assets and liabilities denominated
in foreign currencies, down €84 million to €-81 million, driven by the appreciation of main
currencies against Euro;
higher impact from exceptional and discontinued operations (€-339 million) to €-705 million
mainly due to:
o the negative impact linked to the deconsolidation of AXA Equitable Holdings, Inc. (€-598
million) corresponding to the difference between the fair value and the consolidated
carrying value of EQH at the date of the deconsolidation,
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o the negative impact from the early redemption of financing debt at AXA XL (€-45 million) and
in the United Kingdom & Ireland (€-37 million),
and
o the non-repeat of the one-off benefit from the reimbursement of the tax paid on dividends
received from European subsidiaries held for more than 95% following the decision from the
European Court of Justice (€-71 million) at AXA SA,
o the non-repeat of the gain relating to the discontinuation of the partnership with BNP
Paribas (Natio) in 1H18 in France (€-48 million),
partly offset by:
o the non-repeat of the one-time negative impact linked to the transformation of the in-force
Group Life business model to a semi-autonomous model in Switzerland (€+347 million),
o and the non-repeat of the negative impact related to the IPO of AXA Equitable Holdings, Inc.
(€+97 million);
higher integration and restructuring costs (€-48 million) to €-142 million mainly due to XL Group
integration costs (€-77 million), partly offset by the non-repeat of restructuring costs in the context of
the IPO of AXA Equitable Holdings, Inc. completed in May 2018 in the United States (€+23 million);
higher impact of goodwill and other related intangibles (€-21 million) to €-59 million mainly from
AXA XL (€-19 million) due to the amortization of customer-related intangibles in relation to the
acquisition of XL Group.
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SHAREHOLDERS’ EQUITY GROUP SHARE
As of June 30, 2019, Shareholders' equity Group share totaled €66.7 billion. The movements in Shareholders'
equity Group share since December 31, 2018, are presented in the table below:
(in Euro million) Shareholders' equity Group share
At December 31, 2018 62,428
Share Capital (23)
Capital in excess of nominal value (229)
Equity-share based compensation 17
Treasury shares sold or bought in open market 353
Change in equity component of compound financial instruments -
Deeply subordinated debt (including accumulated interests charges) (98)
Fair value recorded in shareholders' equity 6,191
Impact of currency fluctuations (528)
Payment of N-1 dividend (3,189)
Other (116)
Net income for the period 2,333
Actuarial gains and losses on pension benefits (398)
Reserves relating to changes in fair value of financial liabilities measured at fair value through profit and
loss that are attributable to changes in own credit risk (16)
At June 30, 2019 66,725
SOLVENCY INFORMATION (1)
As of June 30, 2019, the Group’s Eligible Own Funds (“EOF”) amounted to €57.9 billion and the Solvency II ratio
to 190%, compared to €58.2 billion and 193% as of December 31, 2018.
(1) Solvency-related information included in this section, including the Solvency II ratio and the Eligible Own Funds (“EOF”), is not subject to the review of the Half Year 2019 Consolidated Financial Statements, nor the verification of the information otherwise included in this report,
performed by the Group’s statutory auditors.
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SHAREHOLDER VALUE
Earnings per share (“EPS”)
June 30, 2019 June 30, 2018 June 30, 2019 /
June 30, 2018
(in Euro, except ordinary shares in million) Basic Fully
diluted Basic
Fully
diluted Basic
Fully
diluted
Weighted average number of shares 2,381 2,384 2,383 2,388
Net income (Euro per ordinary share) 0.92 0.92 1.13 1.12 (18.0%) (17.9%)
Adjusted earnings (Euro per ordinary share) 1.63 1.62 1.47 1.47 10.2% 10.3%
Underlying earnings (Euro per ordinary share) 1.46 1.46 1.34 1.33 9.5% 9.6%
Return On Equity (“ROE”)
(in Euro million, except percentages) June 30, 2019 June 30, 2018 June 30, 2019 /
June 30, 2018
ROE 7.3% 8.3% (1.0 pt)
Net income 2,333 2,796
Average shareholders' equity 63,883 67,476
Adjusted ROE 18.3% 15.6% 2.8 pt
Adjusted earnings (a) 3,870 3,513
Average shareholders' equity (b) 42,198 45,142
Underlying ROE 16.5% 14.1% 2.4 pt
Underlying earnings (a) 3,484 3,183
Average shareholders' equity (b) 42,198 45,142
(a) Including adjustment to reflect net financial charges related to undated subordinated debt (recorded through shareholders' equity) and preferred shares. Following the
deconsolidation of AXA Equitable Holdings Inc. (“EQH”) and its subsequent accounting under the equity method, it includes an adjustment to reflect financial charges for only the first
three months of the year 2019 related to the equity component of mandatory exchangeable bonds into shares of EQH. (b) Excluding fair value of invested assets and derivatives and undated subordinated debt (both recorded through shareholders' equity).
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SEGMENT INFORMATION
France
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 13 383 13 004 25 175
Life & Savings 7 086 6 745 13 542
Property & Casualty 3 922 4 002 7 061
Health 2 312 2 175 4 356
Other (b) 64 82 215
New business
APE 1 052 1 041 2 232
NBV Margin 28,3% 28,6% 29,5%
Underlying earnings before tax 1 139 1 130 2 313
Life & Savings 482 588 1 143
Property & Casualty 569 485 1 022
Health 88 57 149
Other (b) 1 0 (0)
Income tax expenses / benefits (269) (325) (755)
Minority interests (2) (2) (5)
Income from affiliates and associates 5 14 20
Underlying earnings Group share 873 816 1 573
Net capital gains or losses attributable to shareholders net of income tax 68 76 131
Adjusted earnings Group share 941 892 1 704
Profit or loss on financial assets (under fair value option) and derivatives (60) (68) (91)
Exceptional operations (including discontinued operations) (4) 48 40
Goodwill and other related intangible impacts - - -
Integration and restructuring costs (6) (9) (19)
NET INCOME GROUP SHARE 872 863 1 635
Property & Casualty Combined Ratio 90,8% 93,7% 92,3%
Health Combined Ratio 97,7% 98,7% 97,9%
Protection Combined Ratio 97,8% 94,7% 95,0%
(a) Net of intercompany eliminations.
(b) Other corresponds to banking activities and holding.
Gross revenues increased by €379 million (+3%) to €13,383 million. On a comparable basis, gross revenues
increased by €404 million (+3%):
Life & Savings (€+341 million or +5%) to €7,086 million. On a comparable basis, Life & Savings gross
revenues increased by €270 million (+4%) mainly driven by Individual Savings (€+144 million or +3%) due
to strong sales of G/A capital light products sold through the bancassurance channel and higher sales of
Eurocroissance products sold through the proprietary channel, partly offset by lower Unit-Linked
revenues, which contributed to 34.3% of total Individual Savings, compared to 24.7% on average for the
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market. Protection and Group Savings gross revenues increased respectively by €53 million (+3%) and by
€74 million (+16%) driven by higher sales in both domestic and international markets;
Property & Casualty (€-80 million or -2%) to €3,922 million. On a comparable basis, Property & Casualty
gross revenues decreased by €9 million (0%) mainly driven by Personal lines (€-16 million or -1%) due to
lower volumes in Motor, partly offset by Commercial lines (€+7 million or 0%) supported by tariff and
volume increases mainly in Motor and Property (€+38 million or +3%), partly offset by continued
selectivity in the Credit and Lifestyle Protection business (€-31 million or -9%);
Health (€+137 million or +6%) to €2,312 million. On a comparable basis, Health gross revenues increased
by €129 million (+6%) mainly driven by higher volumes in Group business (€+112 million or +6%) in both
international and domestic markets as well as in Individual business (€+17 million or +5%);
Other (€-19 million or -23%) to €64 million. On a comparable basis, Other gross revenues increased by
€14 million (+28%) at AXA Banque France mainly due to a higher interest margin.
APE increased by €11 million (+1%) to €1,052 million. On a comparable basis, restated mainly for the change of
the Group Health contribution in 1H18, APE decreased by €51 million (-5%) mainly driven by Group Health (€-111
million or -28%) due to the non-repeat of exceptional sales in Group International business, partly offset by Savings
(€+38 million or +8%) and Protection (€+23 million or +11%) mainly reflecting higher sales of mortgage insurance
products.
NBV Margin decreased by 0.3 point to 28.3%. On a comparable basis, restated mainly for the change of the Group
Health contribution in 1H18, NBV Margin increased by 0.4 point mainly driven by an improved business mix.
Underlying earnings before tax increased by €8 million (+1%) to €1,139 million:
Property & Casualty (€+84 million or +17%) to €569 million due to a higher net technical margin (€+125
million) driven by lower Nat Cat charges, lower attritional losses mostly in Personal Motor and higher
prior year reserve developments. This was partly offset by higher expenses (€-29 million) notably to
further enhance customer service and a lower net investment income (€-13 million);
Life & Savings (€-107 million or -18%) to €482 million mainly due to a lower technical margin (€-43
million) linked to lower prior year reserve developments, higher general expenses as well as higher
commissions mainly from business growth combined with an increase in commissioning rates to third-
party distributors;
Health (€+31 million or +55%) to €88 million mainly driven by higher loadings on premiums (€+18 million)
in line with revenue growth and net technical margin;
Other remained stable at €1 million.
Income tax expenses decreased by €57 million (-17%) to €-269 million mainly driven by a decrease in the effective
tax rate resulting from higher dividend distributions on investment funds benefiting from a lower taxation.
Underlying earnings increased by €57 million (+7%) to €873 million.
Adjusted earnings increased by €49 million (+5%) to €941 million driven by higher underlying earnings and lower
net realized capital gains.
Net income increased by €9 million (+1%) to €872 million driven by higher adjusted earnings and a favorable
change in the fair value of credit mutual funds, partly offset by an unfavorable change in the fair value of
derivatives not eligible for hedge accounting, and the non-repeat of the gain relating to the discontinuation of the
partnership with BNP Paribas (Natio) in 2018.
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Half Year 2019 Financial Report
Europe
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 19,978 21,747 36,738
Life & Savings 6,743 9,167 15,679
Property & Casualty 10,292 9,729 15,760
Health 2,937 2,830 5,258
Other (b) 6 21 41
New business
APE 655 640 1,146
NBV Margin 51.1% 51.0% 49.6%
Underlying earnings before tax 1,788 1,688 3,368
Life & Savings 528 557 1,117
Property & Casualty 1,070 973 1,834
Health 142 118 308
Other (b) 49 40 108
Income tax expenses / benefits (407) (380) (755)
Minority interests (48) (39) (84)
Income from affiliates and associates - 1 2
Underlying earnings Group share 1,333 1,271 2,532
Net capital gains or losses attributable to shareholders net of income tax 231 231 266
Adjusted earnings Group share 1,565 1,502 2,797
Profit or loss on financial assets (under fair value option) and derivatives (278) (65) (134)
Exceptional operations (including discontinued operations) (36) (340) (376)
Goodwill and other related intangible impacts (18) (19) (39)
Integration and restructuring costs (25) (24) (107)
NET INCOME GROUP SHARE 1,207 1,054 2,141
Property & Casualty Combined Ratio 92.8% 93.9% 94.5%
Health Combined Ratio 95.4% 96.2% 94.8%
Protection Combined Ratio 95.2% 97.6% 96.7%
(a) Net of intercompany eliminations.
(b) Other corresponds to banking activities and holding.
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Half Year 2019 Financial Report
EUROPE - SWITZERLAND
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 4,881 7,194 9,531
Life & Savings 2,088 4,533 6,534
Property & Casualty 2,776 2,656 2,992
Health 16 5 5
New business
APE 218 250 340
NBV Margin 55.5% 55.8% 53.0%
Underlying earnings before tax 478 487 943
Life & Savings 169 195 404
Property & Casualty 316 299 555
Health (8) (7) (16)
Income tax expenses / benefits (80) (85) (177)
Minority interests (2) (2) (4)
Income from affiliates and associates - - -
Underlying earnings Group share 396 399 762
Net capital gains or losses attributable to shareholders net of income tax 36 46 81
Adjusted earnings Group share 431 445 843
Profit or loss on financial assets (under fair value option) and derivatives (40) 23 (5)
Exceptional operations (including discontinued operations) 1 (340) (421)
Goodwill and other related intangible impacts (12) (13) (26)
Integration and restructuring costs - - -
NET INCOME GROUP SHARE 380 116 391
Property & Casualty Combined Ratio 85.0% 85.1% 87.0%
Health Combined Ratio 199.1% 406.6% 412.5%
Protection Combined Ratio 93.4% 97.5% 97.0%
Average exchange rate: € 1.00 = Swiss Franc 1.13 1.17 1.16
(a) Net of intercompany eliminations.
On January 1, 2019, AXA Switzerland transformed its main occupational benefits foundations model from full
insurance to semi-autonomous. As a result, the change in gross revenues on a comparable basis excludes the
savings portion of the 1H18 premiums related to the transformed in-force Group Life business.
Gross revenues decreased by €2,313 million (-32%) to €4,881 million. On a comparable basis, gross revenues
decreased by €26 million (-1%):
Property & Casualty (€+120 million or +5%) to €2,776 million. On a comparable basis, Property &
Casualty gross revenues increased by €24 million (+1%) mainly driven by Commercial lines due to higher
volumes and tariff increases in Workers’ Compensation, partly offset by a decrease in Personal lines from
Motor in a context of strong market competition;
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Life & Savings (€-2,445 million or -54%) to €2,088 million. On a comparable basis, Life & Savings gross
revenues decreased by €61 million (-4%) in the context of the transformation of the in-force Group Life
business model to a semi-autonomous model;
Health (€+11 million) to €16 million. On a comparable basis, Health gross revenues increased by €11
million after the launch of the business in 2H17.
APE decreased by €32 million (-13%) to €218 million. On a comparable basis, APE decreased by €29 million (-12%)
in the context of the transformation of the in-force Group Life business, partly offset by higher new business in
Individual Life.
NBV Margin decreased by 0.3 point to 55.5%. On a comparable basis, restated for the impact of the
transformation of the in-force Group Life business, NBV Margin decreased by 2.8 points mainly due to an adverse
business mix within Group Life with a higher share of voluntary contributions on the savings component of the
premiums.
Underlying earnings before tax decreased by €9 million (-2%) to €478 million. On a constant exchange rate basis,
underlying earnings before tax decreased by €26 million (-5%):
Property & Casualty (€+17 million or +6%) to €316 million. On a constant exchange rate basis, Property
& Casualty underlying earnings before tax increased by €6 million (+2%) as a result of an improvement in
the current year combined ratio (-1.0 point) from lower Nat Cat charges (-0.5 point) and an improvement
of the expense ratio (-0.3 point), partly offset by less favorable prior year reserve developments (+0.9
point);
Life & Savings (€-26 million or -13%) to €169 million. On a constant exchange rate basis, Life & Savings
underlying earnings before tax decreased by €32 million (-16%) mainly due to the impact of the
transformation of the in-force Group Life business and the non-repeat of an exceptional release of
reserves in Individual Life business;
Health (€-1 million or -10%) to €-8 million. On a constant exchange rate basis, Health underlying earnings
before tax remained stable.
Income tax expenses decreased by €5 million (-6%) to €-80 million. On a constant exchange rate basis, income
tax expenses decreased by €8 million (-9%) in line with lower pre-tax underlying earnings combined with a
decrease in the corporate tax rate from 20% to 19.5%.
Underlying earnings decreased by €4 million (-1%) to €396 million. On a constant exchange rate basis, underlying
earnings decreased by €17 million (-4%).
Adjusted earnings decreased by €14 million (-3%) to €431 million. On a constant exchange rate basis, adjusted
earnings decreased by €29 million (-6%) due to lower underlying earnings and lower net realized capital gains.
Net income increased by €264 million to €380 million. On a constant exchange rate basis, net income increased
by €251 million as lower adjusted earnings and an unfavorable change in the fair value of foreign exchange and
equity derivatives were more than offset by the non-repeat of the negative impact linked to the transformation of
the in-force Group Life business model to a semi-autonomous model in 1H18 (€+347 million).
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Half Year 2019 Financial Report
EUROPE - GERMANY
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 6,088 5,934 10,738
Life & Savings 1,635 1,786 3,559
Property & Casualty 2,790 2,531 4,006
Health 1,657 1,596 3,131
Other (b) 6 21 41
New business
APE 181 161 340
NBV Margin 55.2% 52.8% 53.0%
Underlying earnings before tax 464 419 851
Life & Savings 94 95 190
Property & Casualty 269 230 438
Health 60 54 117
Other (b) 42 39 107
Income tax expenses / benefits (140) (111) (238)
Minority interests (3) (0) (4)
Income from affiliates and associates - 1 2
Underlying earnings Group share 321 308 612
Net capital gains or losses attributable to shareholders net of income tax 15 123 127
Adjusted earnings Group share 336 431 738
Profit or loss on financial assets (under fair value option) and derivatives (72) (29) (50)
Exceptional operations (including discontinued operations) - - 27
Goodwill and other related intangible impacts (2) (2) (4)
Integration and restructuring costs (3) (2) (4)
NET INCOME GROUP SHARE 259 398 708
Property & Casualty Combined Ratio 93.6% 95.2% 95.6%
Health Combined Ratio 96.4% 96.6% 96.3%
Protection Combined Ratio 98.5% 98.5% 97.6%
(a) Net of intercompany eliminations.
(b) Other corresponds to banking activities and holding.
On October 1, 2018, AXA Germany increased its ownership in Roland Rechtsschutz from 41% to 60%. As a result,
Roland Rechtsschutz has been consolidated from October 1, 2018. Property & Casualty comparable basis has
been adjusted to include Roland Rechtsschutz gross revenues in 2018.
On October 31, 2018, AXA Germany completed the disposal of a part of its occupational pension business. Life &
Savings comparable basis in Gross revenues, APE and NBV have been adjusted accordingly to exclude the
contribution of this business in 2018.
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Gross revenues increased by €155 million (+3%) to €6,088 million. On a comparable basis, gross revenues
increased by €66 million (+1%):
Property & Casualty (€+259 million or +10%) to €2,790 million. On a comparable basis Property &
Casualty gross revenues increased by €40 million (+1%) driven by Commercial Non-Motor (€+38 million or
+4%) due to new business in Mid-Market and SMEs as well as a higher average premium;
Health (€+61 million or +4%) to €1,657 million. On a comparable basis, Health gross revenues increased
by €61 million (+4%) mainly due to the continued growth in the civil servants segment and tariff increases
in full benefit insurance;
Life & Savings (€-151 million or -8%) to €1,635 million. On a comparable basis, Life & Savings gross
revenues decreased by €23 million (-1%) mainly in Protection with Savings (€-29 million or -6%) and
traditional G/A Savings (€-10 million or -5%) reflecting the decrease in the legacy business, in line with
the strategy, and in Unit-Linked (€-28 million or -8%) due to lower single premium, partly offset by higher
new business in G/A capital light products (€+33 million or +12%) and Pure Protection (€+17 million or
+7%) following the launch of a new disability product.
APE increased by €20 million (+12%) to €181 million. On a comparable basis, APE increased by €15 million (+9%)
mainly due to higher new business in G/A capital light products (€+9 million or +24%), Pure Protection (€+4 million
or +17%) following the launch of a new disability product as well as in Health (€+5 million or +9%) both in private
and civil servants segments.
NBV Margin increased by 2.4 points to 55.2% mainly reflecting a higher share of Pure Protection and G/A capital
light product sales.
Underlying earnings before tax increased by €45 million (+11%) to €464 million:
Property & Casualty (€+39 million or +17%) to €269 million driven by an improved current year
combined ratio (-2.2 points) from lower Nat Cat charges and favorable attritional losses, partly offset by
less favorable prior year reserve developments (+0.5 point) and a lower net investment result (€-6
million);
Life & Savings (€-2 million or -2%) to €94 million;
Health (€+5 million or +10%) to €60 million due to higher volumes combined with an improved combined
ratio (-0.2 point);
Other (€+2 million or +6%) to €42 million from Holdings (€+2 million) mainly due to lower pension costs,
partly offset by the non-repeat of an exceptional distribution from an investment fund.
Income tax expenses increased by €29 million (+26%) to €-140 million due to higher pre-tax underlying earnings
and less favorable tax one-offs (€-14 million).
Income from affiliates and associates decreased by €1 million to €0 million.
Underlying earnings increased by €13 million (+4%) to €321 million.
Adjusted earnings decreased by €95 million (-22%) to €336 million as higher underlying earnings were more than
offset by lower net realized capital gains mainly from equities.
Net income decreased by €139 million (-35%) to €259 million driven by lower adjusted earnings and an
unfavorable change in the fair value of interest rate and equity derivatives not eligible for hedge accounting.
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Half Year 2019 Financial Report
EUROPE - BELGIUM
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 1,794 1,754 3,359
Life & Savings 574 575 1,195
Property & Casualty 1,160 1,118 2,061
Health 60 61 103
New business
APE 36 25 64
NBV Margin 56.1% 76.8% 66.5%
Underlying earnings before tax 254 275 528
Life & Savings 141 140 281
Property & Casualty 113 137 246
Health 1 (1) 0
Other (b) (1) (1) 1
Income tax expenses / benefits (62) (70) (125)
Minority interests (0) (0) (0)
Income from affiliates and associates - - -
Underlying earnings Group share 192 204 403
Net capital gains or losses attributable to shareholders net of income tax 164 53 50
Adjusted earnings Group share 355 258 454
Profit or loss on financial assets (under fair value option) and derivatives (111) (44) (42)
Exceptional operations (including discontinued operations) - - 3
Goodwill and other related intangible impacts (1) (1) (2)
Integration and restructuring costs 1 (3) (40)
NET INCOME GROUP SHARE 244 209 373
Property & Casualty Combined Ratio 97.0% 94.4% 95.7%
Health Combined Ratio 101.2% 105.0% 102.1%
Protection Combined Ratio 98.2% 100.6% 96.0%
(a) Net of intercompany eliminations. (b) Other corresponds to holding.
Gross revenues increased by €40 million (+2%) to €1,794 million. On a comparable basis, gross revenues
increased by €40 million (+2%):
Property & Casualty (€+42 million or +4%) to €1,160 million. On a comparable basis, Property & Casualty
gross revenues increased by €42 million (+4%) from Commercial lines (€+35 million or +7%) in Mid-Market
segments, notably in the Public sector and SMEs, due to new business and tariff increases, as well as from
Personal lines (€+7 million or +1%) mainly due to tariff increases;
Life & Savings (€0m or 0%) to €574 million. On a comparable basis, Life & Savings gross revenues
remained stable as the increase in Unit-Linked and G/A Savings pension products was offset by the
decrease in Protection with Savings and Pure G/A Savings products, in line with the strategy to exit
Individual Savings market;
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Health (€-2 million or -3%) to €60 million. On a comparable basis, Health gross revenues decreased by
€2 million (-3%) due to the non-repeat of an exceptional premium in Group business.
APE increased by €11 million (+42%) to €36 million. On a comparable basis, APE increased by €11 million (+42%)
mainly driven by Unit-Linked due to a large Group pension contract in Savings.
NBV Margin decreased by 20.7 points to 56.1% driven by a large Group pension contract in Savings.
Underlying earnings before tax decreased by €21 million (-8%) to €254 million:
Life & Savings (€+1 million or +1%) to €141 million driven by a higher net technical margin (€+8 million)
mainly due to the non-repeat of exceptional unfavorable prior year reserve developments, as well as
lower expenses (€+9 million) resulting from the cost savings program, partly offset by a lower investment
margin (€-13 million) mainly due to a lower distribution from funds;
Property & Casualty (€-24 million or -17%) to €113 million mainly driven by a higher current year
combined ratio (+1.7 points) primarily due to the impact of Eberhard storm (€-27 million) and higher large
losses, as well as less favorable prior year reserve developments (+0.9 point), partly offset by a lower
expense ratio resulting from the cost savings program;
Health (€+2 million) to €1 million due to higher favorable prior year reserve developments and lower
expenses;
Other remained stable at €-1 million.
Income tax expenses decreased by €8 million (-11%) to €-62 million driven by lower pre-tax underlying earnings.
Underlying earnings decreased by €13 million (-6%) to €192 million.
Adjusted earnings increased by €98 million (+38%) to €355 million as lower underlying earnings were more than
offset by higher net realized capital gains (€+111 million) on real estate mainly due to an exceptional sale (€+85
million) and equities.
Net income increased by €35 million (+17%) to €244 million as higher adjusted earnings were partly offset by
an unfavorable change in the fair value of interest rate and equity derivatives not eligible for hedge accounting.
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EUROPE - UNITED KINGDOM & IRELAND
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 2,856 2,762 5,166
Life & Savings 26 28 57
Property & Casualty 1,817 1,737 3,369
Health 1,013 998 1,740
Underlying earnings before tax 245 194 437
Life & Savings 1 2 3
Property & Casualty 154 127 250
Health 81 63 184
Other (b) 9 2 0
Income tax expenses / benefits (35) (27) (56)
Minority interests (0) (0) (0)
Income from affiliates and associates - - -
Underlying earnings Group share 209 167 381
Net capital gains or losses attributable to shareholders net of income tax 10 8 (6)
Adjusted earnings Group share 219 175 375
Profit or loss on financial assets (under fair value option) and derivatives (46) (7) (23)
Exceptional operations (including discontinued operations) (37) - 21
Goodwill and other related intangible impacts (2) (2) (4)
Integration and restructuring costs (9) - (3)
NET INCOME GROUP SHARE 125 166 366
Property & Casualty Combined Ratio 96.7% 98.5% 98.4%
Health Combined Ratio 92.3% 94.5% 91.2%
(a) Net of intercompany eliminations.
(b) Other corresponds to holding.
Gross revenues increased by €94 million (+3%) to €2,856 million. On a comparable basis, gross revenues
increased by €77 million (+3%):
Property & Casualty (€+81 million or +5%) to €1,817 million. On a comparable basis, Property & Casualty
gross revenues increased by €71 million (+4%) from Personal lines (€+36 million or +4%) mainly in Motor
reflecting higher new business and Commercial lines (€+34 million or +4%) mainly in Motor due to tariff
increases and higher new business, and in Property mainly due to higher new business;
Health (€+15 million or +2%) to €1,013 million. On a comparable basis, Health gross revenues increased
by €8 million (+1%) mainly driven by a new partnership in international business;
Life & Savings - Architas (€-2 million or -7%) to €26 million. On a comparable basis, Life & Savings -
Architas gross revenues decreased by €2 million (-7%).
Underlying earnings before tax increased by €51 million (+26%) to €245 million. On a constant exchange rate
basis, underlying earnings before tax increased by €49 million (+25%):
Property & Casualty (€+27 million or +21%) to €154 million. On a constant exchange rate basis, Property
& Casualty underlying earnings before tax increased by €26 million (+21%) due to (i) a lower current year
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combined ratio (-1.4 points) mainly driven by more favorable weather conditions and lower large losses,
partly offset by an increased severity of Motor damage claims and higher expenses from commissions in
Ireland due to a higher share of Commercial lines, as well as (ii) more favorable prior year reserve
developments (-0.5 point), partly offset by (iii) a lower net investment income;
Health (€+18 million or +28%) to €81 million. On a constant exchange rate basis, Health underlying
earnings before tax increased by €17 million (+27%) driven by a lower combined ratio (-2.2 points) mainly
in the United Kingdom due to improvements in claims management, as well as volume growth and an
improved profitability in international business;
Other (€+7 million) to €9 million. On a constant exchange rate basis, Other underlying earnings before
tax increased by €7 million mainly due to lower interest payments and a higher net investment income
at AXA UK Holdings;
Life & Savings - Architas (€-1 million or -30%) to €1 million. On a constant exchange rate basis, Life &
Savings - Architas underlying earnings before tax decreased by €1 million.
Income tax expenses increased by €8 million (+31%) to €-35 million. On a constant exchange rate basis, income
tax expenses increased by €8 million (+30%) driven by higher pre-tax underlying earnings.
Underlying earnings increased by €42 million (+25%) to €209 million. On a constant exchange rate basis,
underlying earnings increased by €41 million (+25%).
Adjusted earnings increased by €45 million (+26%) to €219 million. On a constant exchange rate basis, adjusted
earnings increased by €44 million (+25%) mainly driven by higher underlying earnings.
Net income decreased by €40 million (-24%) to €125 million. On a constant exchange rate basis, net income
decreased by €41 million (-25%) as higher adjusted earnings were more than offset by an unfavorable change in
the fair value of interest rate and equity derivatives not eligible to hedge accounting and a loss relating to the
early redemption of a financing debt (€-37 million).
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EUROPE - SPAIN
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 1,370 1,284 2,525
Life & Savings 346 305 680
Property & Casualty 878 843 1,644
Health 146 136 202
New business
APE 48 39 88
NBV Margin 87.4% 80.8% 79.5%
Underlying earnings before tax 147 136 245
Life & Savings 32 42 71
Property & Casualty 108 86 152
Health 8 8 22
Income tax expenses / benefits (36) (34) (59)
Minority interests (0) (0) (0)
Income from affiliates and associates - - -
Underlying earnings Group share 112 102 186
Net capital gains or losses attributable to shareholders net of income tax 1 (2) 6
Adjusted earnings Group share 113 100 192
Profit or loss on financial assets (under fair value option) and derivatives (7) (2) (5)
Exceptional operations (including discontinued operations) - - -
Goodwill and other related intangible impacts (1) (2) (3)
Integration and restructuring costs (11) (15) (36)
NET INCOME GROUP SHARE 94 81 147
Property & Casualty Combined Ratio 92.3% 95.5% 96.4%
Health Combined Ratio 93.3% 92.6% 89.5%
Protection Combined Ratio 95.5% 92.7% 94.0%
(a) Net of intercompany eliminations.
Gross revenues increased by €86 million (+7%) to €1,370 million. On a comparable basis, gross revenues
increased by €86 million (+7%):
Property & Casualty (€+35 million or +4%) to €878 million. On a comparable basis, Property & Casualty
gross revenues increased by €35 million (+4%) driven by higher volumes and tariff increases in both
Commercial lines (€+24 million or +12%) and Personal lines (€+11 million or +2%);
Life & Savings (€+41 million or +13%) to €346 million. On a comparable basis, Life & Savings gross
revenues increased by €41 million (+13%) driven by strong sales in Protection (€+17 million or +20%), G/A
Savings (€+15 million or +20%) and Unit-Linked (€+12 million or +9%);
Health (€+10 million or +7%) to €146 million. On a comparable basis, Health gross revenues increased by
€10 million (+7%) driven by higher volumes and tariff increases.
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APE increased by €10 million (+25%) to €48 million. On a comparable basis, APE increased by €10 million (+25%)
driven by Protection (€+4 million or +33%), G/A Savings (€+3 million or +55%) and Unit-Linked (€+3 million or +16%).
NBV Margin increased by 6.7 points to 87.4% mainly driven by a higher share of Protection product sales.
Underlying earnings before tax increased by €12 million (+9%) to €147 million:
Property & Casualty (€+22 million or +25%) to €108 million driven by higher volumes combined with an
improved current year combined ratio (-3.6 points) mainly driven by a more favorable current year claims
experience along with lower Nat Cat charges, partly offset by a lower net investment income (€-6 million);
Life & Savings (€-10 million or -24%) to €32 million mainly driven by a lower net technical margin in
annuities in Group G/A Savings;
Health remained stable at €8 million.
Income tax expenses increased by €2 million (+6%) to €-36 million in line with higher pre-tax underlying earnings.
Underlying earnings increased by €10 million (+9%) to €112 million.
Adjusted earnings increased by €13 million (+13%) to €113 million mainly driven by higher underlying earnings.
Net income increased by €12 million (+15%) to €94 million mainly driven by higher adjusted earnings.
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EUROPE - ITALY
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 2,989 2,820 5,418
Life & Savings 2,073 1,941 3,653
Property & Casualty 870 845 1,688
Health 46 35 77
New business
APE 172 164 315
NBV Margin 30.2% 31.1% 30.7%
Underlying earnings before tax 201 179 364
Life & Savings 90 83 169
Property & Casualty 110 95 193
Health 0 1 1
Other (b) - 0 0
Income tax expenses / benefits (54) (52) (101)
Minority interests (43) (36) (75)
Income from affiliates and associates - - -
Underlying earnings Group share 104 90 188
Net capital gains or losses attributable to shareholders net of income tax 6 4 8
Adjusted earnings Group share 110 94 196
Profit or loss on financial assets (under fair value option) and derivatives (2) (6) (9)
Exceptional operations (including discontinued operations) - - (5)
Goodwill and other related intangible impacts - - -
Integration and restructuring costs (2) (4) (24)
NET INCOME GROUP SHARE 105 85 158
Property & Casualty Combined Ratio 92.4% 95.1% 94.4%
Health Combined Ratio 101.3% 99.1% 101.0%
Protection Combined Ratio 80.2% 83.8% 80.8%
(a) Net of intercompany eliminations.
(b) Other corresponds to holding.
Gross revenues increased by €169 million (+6%) to €2,989 million. On a comparable basis, gross revenues
increased by €169 million (+6%):
Life & Savings (€+133 million or +7%) to €2,073 million. On a comparable basis, Life & Savings gross
revenues increased by €133 million (+7%) mainly in Unit-Linked (€+102 million or +23%) due to the sales
of Protected Unit-Linked products and G/A Savings (€+21 million or +2%) mainly from the sales of hybrid
products;
Property & Casualty (€+25 million or +3%) to €870 million. On a comparable basis, Property & Casualty
gross revenues increased by €25 million (+3%) driven by higher new business and renewals in Motor and
Property on both Personal lines (€+16 million or +3%) and Commercial lines (€+8 million or +4%);
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Health (€+11 million or +31%) to €46 million. On a comparable basis, Health gross revenues increased by
€11 million (+31%) as a result of a strong commercial focus.
APE increased by €8 million (+5%) to €172 million. On a comparable basis, APE increased by €8 million (+5%)
driven by G/A Savings (€+12 million or +15%) mainly from the sales of hybrid products.
NBV Margin decreased by 0.9 point to 30.2% mainly due to a change in product mix with higher share of G/A
Savings new business.
Underlying earnings before tax increased by €22 million (+12%) to €201 million:
Property & Casualty (€+15 million or +16%) to €110 million due to the improvement of the current year
combined ratio (-1.1 points) driven by an improved loss ratio in Personal lines with lower frequency in
attritional losses mainly in Motor and Property, combined with more favorable prior year reserve
developments (-1.6 points), partly offset by a lower net investment income;
Life & Savings (€+7 million or +9%) to €90 million mainly due to a higher investment margin (€+5 million)
driven by in-force growth and lower minimum guaranteed rates, partly offset by the decrease in
investment yields, and higher fees & revenues (€+3 million) mainly driven by higher Unit-Linked
management fees;
Health (€-1 million) to €0 million.
Income tax expenses increased by €1 million (+2%) to €-54 million driven by higher pre-tax underlying earnings,
partly offset by positive tax one-offs.
Minority interests increased by €7 million (+18%) to €-43 million as a result of the increase of AXA MPS underlying
earnings.
Underlying earnings increased by €14 million (+16%) to €104 million.
Adjusted earnings increased by €15 million (+16%) to €110 million mainly driven by higher underlying earnings.
Net income increased by €21 million (+24%) to €105 million driven by higher adjusting earnings, a favorable
change in the fair value of assets accounted for under fair value option, as well as lower restructuring costs
resulting from pre-retirement plans.
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Asia
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 4,827 4,339 8,973
Life & Savings 3,087 2,735 5,780
Property & Casualty 677 630 1,245
Health 1,063 974 1,947
New business
APE 867 763 1,520
NBV Margin 59.2% 60.5% 62.2%
Underlying earnings before tax 666 592 1,156
Life & Savings 391 342 665
Property & Casualty 48 37 68
Health 236 215 426
Other (b) (8) (2) (3)
Income tax expenses / benefits (133) (112) (219)
Minority interests (4) (4) (7)
Income from affiliates and associates 91 67 171
Underlying earnings Group share 620 544 1,101
Net capital gains or losses attributable to shareholders net of income tax 10 (8) (34)
Adjusted earnings Group share 631 536 1,067
Profit or loss on financial assets (under fair value option) and derivatives 2 (22) (53)
Exceptional operations (including discontinued operations) - (6) 4
Goodwill and other related intangible impacts (8) (8) (18)
Integration and restructuring costs (1) (13) (13)
NET INCOME GROUP SHARE 625 487 987
Property & Casualty Combined Ratio 95.4% 96.5% 97.1%
Health Combined Ratio 77.5% 77.7% 78.8%
Protection Combined Ratio 86.3% 86.0% 86.8%
(a) Net of intercompany eliminations. (b) Other corresponds to holding.
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ASIA - JAPAN
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 2,414 2,309 4,564
Life & Savings 1,698 1,639 3,203
Health 716 670 1,361
New business
APE 268 279 546
NBV Margin 111.2% 92.3% 97.8%
Underlying earnings before tax 392 352 695
Life & Savings 183 156 300
Health 217 196 395
Other (b) (8) - -
Income tax expenses / benefits (111) (92) (189)
Minority interests (4) (3) (7)
Income from affiliates and associates - - -
Underlying earnings Group share 277 256 499
Net capital gains or losses attributable to shareholders net of income tax (0) 0 8
Adjusted earnings Group share 277 256 507
Profit or loss on financial assets (under fair value option) and derivatives (8) (13) (40)
Exceptional operations (including discontinued operations) - 0 4
Goodwill and other related intangible impacts - - -
Integration and restructuring costs - - -
NET INCOME GROUP SHARE 270 244 471
Health Combined Ratio 70.0% 71.2% 72.0%
Protection Combined Ratio 87.5% 87.4% 87.7%
Average exchange rate: € 1.00 = Japanese Yen 124 132 130
(a) Net of intercompany eliminations. (b) Other corresponds to holding.
Gross revenues increased by €106 million (+5%) to €2,414 million. On a comparable basis, gross revenues
decreased by €27 million (-1%):
Life & Savings (€+60 million or +4%) to €1,698 million. On a comparable basis, Life & Savings gross
revenues decreased by €34 million (-2%) mainly due to G/A Savings (€-86 million or -23%) and Unit-Linked
(€-23 million or -57%) due to continued lower new business from the G/A capital light Single Premium
Whole Life product, partly offset by Protection with Savings (€+85 million or +7%) mainly from in-force
growth on regular premiums;
Health (€+46 million or +7%) to €716 million. On a comparable basis, Health gross revenues increased by
€7 million (+1%) mainly from Medical Whole Life products, notably due to the success of Medical Care
products, partly offset by lower new business from Medical Term products.
APE decreased by €11 million (-4%) to €268 million. On a comparable basis, APE decreased by €26 million (-9%)
mainly due to lower new business in Protection with Savings (€-24 million or -12%) following the announcement
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of a tax rule change as well as the decrease of the G/A capital light Single Premium Whole Life product (€-11 million
or -51%), partly offset by growth in Health (€+10 million or +21%).
NBV Margin increased by 18.9 points to 111.2% mainly driven by a favorable business mix from Protection to
Health products.
Underlying earnings before tax increased by €40 million (+11%) to €392 million. On a constant exchange rate
basis, underlying earnings before tax increased by €18 million (+5%):
Health (€+21 million or +11%) to €217 million. On a constant exchange rate basis, Health underlying
earnings before tax increased by €9 million (+5%) mainly due to an improved morbidity experience in
Medical Whole Life products (€+6 million);
Life & Savings (€+26 million or +17%) to €183 million. On a constant exchange rate basis, Life & Savings
underlying earnings before tax increased by €16 million (+11%) primarily driven by higher fees &
revenues, net technical margin and expenses mainly due to in-force growth in Protection with Savings;
Other (€-8 million) to €-8 million. On a constant exchange rate basis, Other underlying earnings before
tax decreased by €8 million mainly due to one-off costs linked to the establishment of the holding
company (€-5 million).
Income tax expenses increased by €18 million (+20%) to €-111 million. On a constant exchange rate basis,
income tax expenses increased by €12 million (+13%) driven by lower positive tax one-offs combined with higher
pre-tax underlying earnings.
Underlying earnings increased by €21 million (+8%) to €277 million. On a constant exchange rate basis,
underlying earnings increased by €6 million (+2%).
Adjusted earnings increased by €21 million (+8%) to €277 million. On a constant exchange rate basis, adjusted
earnings increased by €6 million (+2%) driven by higher underlying earnings.
Net income increased by €26 million (+11%) to €270 million. On a constant exchange rate basis, net income
increased by €11 million (+5%) driven by higher adjusted earnings combined with a favorable change in the fair
value of derivatives not eligible for hedge accounting, partly offset by an unfavorable change in the fair value of
mutual funds.
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ASIA - HONG KONG
(in Euro million, except percentages)
June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 1,830 1,475 3,305
Life & Savings 1,362 1,069 2,521
Property & Casualty 143 124 240
Health 325 283 545
New business
APE 268 204 456
NBV Margin 44.9% 49.5% 47.2%
Underlying earnings before tax 237 207 404
Life & Savings 206 183 358
Property & Casualty 13 9 22
Health 17 15 25
Income tax expenses / benefits (14) (9) (13)
Minority interests - - -
Income from affiliates and associates - - -
Underlying earnings Group share 223 198 391
Net capital gains or losses attributable to shareholders net of income tax 0 (1) (2)
Adjusted earnings Group share 223 198 389
Profit or loss on financial assets (under fair value option) and derivatives 12 (4) (5)
Exceptional operations (including discontinued operations) - - -
Goodwill and other related intangible impacts (7) (8) (15)
Integration and restructuring costs (0) (13) (13)
NET INCOME GROUP SHARE 228 173 357
Property & Casualty Combined Ratio 95.3% 96.3% 95.5%
Health Combined Ratio 94.4% 94.5% 95.6%
Protection Combined Ratio 84.2% 83.1% 85.4%
Average exchange rate: € 1.00 = Hong Kong Dollar 8.86 9.49 9.26
(a) Net of intercompany eliminations.
Gross revenues increased by €354 million (+24%) to €1,830 million. On a comparable basis, gross revenues
increased by €234 million (+16%):
Life & Savings (€+294 million or +28%) to €1,362 million. On a comparable basis, Life & Savings gross
revenues increased by €204 million (+19%) mainly in Protection with Savings (€+156 million or +20%)
driven by in-force growth and higher new business in brokers and agency channels, Unit-Linked (€+38
million or +66%) driven by growth in single premium new business, and G/A Savings (€+13 million or
+10%) driven by in-force growth;
Health (€+42 million or +15%) to €325 million. On a comparable basis, Health gross revenues increased
by €21 million (+7%) mainly driven by higher volumes in Individual business and tariff increases in Group
business;
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Property & Casualty (€+19 million or +15%) to €143 million. On a comparable basis, Property & Casualty
gross revenues increased by €9 million (+7%) mainly due to higher volumes in both Personal and
Commercial lines and tariff increases in Commercial lines.
APE increased by €64 million (+31%) to €268 million. On a comparable basis, APE increased by €46 million (+23%)
driven by strong sales in Protection with Savings (€+78 million or +67%), partly offset by lower sales in G/A Savings
(€-22 million or -49%) and Group Health (€-9 million or -57%).
NBV Margin decreased by 4.6 points to 44.9% mainly driven by the redesign of Protection and Critical Illness
products combined with a change in distribution mix.
Underlying earnings before tax increased by €29 million (+14%) to €237 million. On a constant exchange rate
basis, underlying earnings before tax increased by €14 million (+7%):
Life & Savings (€+23 million or +13%) to €206 million. On a constant exchange rate basis, Life & Savings
underlying earnings before tax increased by €10 million (+5%) mainly due to volume growth;
Health (€+2 million or +17%) to €17 million. On a constant exchange rate basis, Health underlying
earnings before tax increased by €1 million (+9%) mainly driven by volume growth;
Property & Casualty (€+4 million or +38%) to €13 million. On a constant exchange rate basis, Property &
Casualty underlying earnings before tax increased by €3 million (+29%) mainly due to pricing actions in
Personal Motor and Workers’ Compensation as well as volume growth in both Personal and Commercial
lines.
Income tax expenses increased by €5 million (+52%) to €-14 million. On a constant exchange rate basis, income
tax expenses increased by €4 million (+42%) mainly driven by higher pre-tax underlying earnings.
Underlying earnings increased by €25 million (+12%) to €223 million. On a constant exchange rate basis,
underlying earnings increased by €10 million (+5%).
Adjusted earnings increased by €26 million (+13%) to €223 million. On a constant exchange rate basis, adjusted
earnings increased by €11 million (+6%) mainly driven by higher underlying earnings.
Net income increased by €55 million (+32%) to €228 million. On a constant exchange rate basis, net income
increased by €40 million (+23%) driven by higher adjusted earnings, a favorable change in the fair value of
derivatives not eligible for hedge accounting, as well as the non-repeat of restructuring costs in 1H18.
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ASIA - HIGH POTENTIALS
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 75 77 153
Life & Savings 26 28 56
Property & Casualty 29 31 58
Health 20 18 39
New business
APE 331 280 517
NBV Margin 28.8% 36.9% 37.9%
Underlying earnings before tax 2 1 6
Life & Savings 2 2 8
Property & Casualty (1) (6) (8)
Health 1 4 6
Income tax expenses / benefits 1 (1) (2)
Minority interests 0 0 0
Income from affiliates and associates 91 67 171
Underlying earnings Group share 94 67 176
Net capital gains or losses attributable to shareholders net of income tax 10 (6) (40)
Adjusted earnings Group share 104 62 136
Profit or loss on financial assets (under fair value option) and derivatives (7) (6) (8)
Exceptional operations (including discontinued operations) - - -
Goodwill and other related intangible impacts (0) - (2)
Integration and restructuring costs (0) - -
NET INCOME GROUP SHARE 97 55 126
Property & Casualty Combined Ratio 105.8% 117.6% 114.3%
Health Combined Ratio 98.0% 85.2% 90.1%
Protection Combined Ratio 113.7% 111.8% 103.9%
(a) Net of intercompany eliminations.
Scope: (i) The Property & Casualty subsidiary in Thailand and the non-bancassurance Life & Savings subsidiary in
Indonesia are fully consolidated; (ii) China, the Philippines and the bancassurance Life & Savings subsidiaries in
Thailand and Indonesia, are consolidated under the equity method and contribute only to the underlying
earnings, adjusted earnings and net income.
Gross revenues decreased by €2 million (-2%) to €75 million. On a comparable basis, gross revenues decreased
by €6 million (-8%):
Property & Casualty (€-2 million or -6%) to €29 million. On a comparable basis, Property & Casualty
gross revenues decreased by €4 million (-12%) in Thailand (€-4 million) driven by lower revenues
following pruning actions in both Commercial Property and Personal Motor;
Life & Savings (€-2 million or -7%) to €26 million. On a comparable basis, Life & Savings gross revenues
decreased by €3 million (-11%) in Indonesia mainly driven by lower volumes in Protection with Savings
(€-4 million or -18%);
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Health (€+2 million or +10%) to €20 million. On a comparable basis, Health gross revenues increased by
€1 million (+5%) in Indonesia (€+1 million) driven by in-force growth and higher new business.
APE increased by €52 million (+18%) to €331 million. On a comparable basis, APE increased by €42 million (+15%):
China (€+71 million or +60%) to €189 million. On a comparable basis, APE increased by €70 million (+60%)
due to strong sales of G/A Savings products (€+71 million or +84%) during the Chinese New Year;
Thailand (€-16 million or -20%) to €64 million. On a comparable basis, APE decreased by €20 million (-
25%) driven by Protection with Savings (€-11 million or -24%) due to lower sales of low margin products
combined with lower sales of Unit-Linked products (€-10 million);
Indonesia (€-3 million or -6%) to €52 million. On a comparable basis, APE decreased by €5 million (-10%)
mainly driven by lower new business in Protection with Savings in both telemarketing and bancassurance
channels, partly offset by successful sales of a newly launched Health product;
The Philippines (€-1 million or -2%) to €27 million. On a comparable basis, APE decreased by €2 million (-9%)
from Protection with Savings (€-3 million or -15%) due to lower sales in bancassurance channel.
NBV Margin decreased by 8.1 points to 28.8%. On a comparable basis, NBV Margin decreased by 8.2 points mainly
driven by strong volumes of low-margin G/A Savings products in China during the Chinese New Year.
Underlying earnings before tax increased by €1 million to €2 million. On a constant exchange rate basis,
underlying earnings before tax increased by €1 million:
Life & Savings (€-1 million or -23%) to €2 million. On a constant exchange rate basis, Life & Savings
underlying earnings before tax decreased by €1 million (-26%) in Indonesia mainly due to a lower net
technical margin;
Health (€-3 million or -69%) to €1 million. On a constant exchange rate basis, Health underlying earnings
before tax decreased by €3 million (-71%) mainly in Indonesia (€-3 million) due to an unfavorable claims
experience;
Property & Casualty (€+5 million or +85%) to €-1 million. On a constant exchange rate basis, Property &
Casualty underlying earnings before tax increased by €5 million (+86%) in Thailand due to a more
favorable claims experience reflecting successful pruning actions.
Income tax expenses decreased by €2 million to €1 million. On a constant exchange rate basis, income tax
expenses decreased by €2 million driven by lower pre-tax underlying earnings in Indonesia (€+2 million), partly
offset by higher pre-tax underlying earnings in Thailand (€-1 million).
Income from affiliates and associates increased by €24 million (+35%) to €91 million. On a constant exchange
rate basis, income from affiliates and associates increased by €19 million (+29%):
Thailand (€+8 million or +28%) to €38 million mainly due to a more favorable claims experience and lower
expenses;
China (€+9 million or +75%) to €21 million mainly driven by favorable tax impacts supported by a
regulatory change;
Indonesia (€0 million or +2%) to €19 million;
The Philippines (€+3 million or +25%) to €13 million mainly driven by an improved claims experience and
a favorable change in business mix.
Underlying earnings increased by €27 million (+39%) to €94 million. On a constant exchange rate basis,
underlying earnings increased by €22 million (+33%).
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Adjusted earnings increased by €43 million (+69%) to €104 million. On a constant exchange rate basis, adjusted
earnings increased by €38 million (+62%) driven by higher underlying earnings and higher net realized capital
gains in China due to the positive equity market performance.
Net income increased by €42 million (+76%) to €97 million. On a constant exchange rate basis, net income
increased by €38 million (+68%) driven by higher adjusted earnings.
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AXA XL
(in Euro million, except percentages) June 30,
2019
June 30, 2018
restated (a)
December 31,
2018
Gross revenues (b) 10,436 1,755 6,287
Life & Savings 95 - 45
Property & Casualty Insurance 4,961 1,197 3,354
Property & Casualty Specialty 2,632 557 1,794
Property & Casualty Reinsurance 2,748 - 1,093
Underlying earnings before tax 603 111 (178)
Life & Savings 7 - 5
Property & Casualty Insurance & Specialty 363 111 103
Property & Casualty Reinsurance 281 - (277)
Other (c) (48) - (10)
Income tax expenses / benefits (100) (33) (70)
Minority interests (2) (1) 18
Income from affiliates and associates 1 - (3)
Underlying earnings Group share 502 77 (233)
Net capital gains or losses attributable to shareholders net of income tax 45 28 (27)
Adjusted earnings Group share 547 105 (260)
Profit or loss on financial assets (under fair value option) and derivatives (6) (27) (63)
Exceptional operations (including discontinued operations) (45) (4) (29)
Goodwill and other related intangible impacts (20) - (10)
Integration and restructuring costs (82) - (67)
NET INCOME GROUP SHARE 394 75 (428)
Property & Casualty Combined Ratio 98.3% 99.4% 108.6%
Protection Combined Ratio 104.3% n/a 89.2%
(a) Restated: as per new governance. (b) Net of intercompany eliminations.
(c) Other corresponds to holding.
Gross revenues increased by €8,681 million (+495%) to €10,436 million. On a comparable basis, gross revenues
increased by €802 million (+9%):
Property & Casualty Insurance (€+3,764 million or +314%) to €4,961 million. On a comparable basis,
Property & Casualty Insurance gross revenues increased by €616 million (+15%) mainly driven by both
volume growth and rate increases across most lines of business, notably in North America Professional
(€+214 million or +47%), including a new significant multi-year contract written in the first quarter, and
in Property (€+193 million or +17%);
Property & Casualty Reinsurance at €2,748 million. On a comparable basis, Property & Casualty
Reinsurance gross revenues increased by €50 million (+2%) driven by both volume growth and rate
increases in Specialty and Other lines (€+115 million or +19%) mainly from Lloyds Whole Accounts, North
America Agriculture and North America Accident & Health, partly offset by lower premiums in Property Cat
(€-49 million or -7%) reflecting a reduced Nat Cat exposure;
Property & Casualty Specialty (€+2,074 million or +372%) to €2,632 million. On a comparable basis,
Property & Casualty Specialty gross revenues increased by €137 million (+6%) driven by both volume
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growth and rate increase across most lines of business, notably in Political Risks (€+35 million or +21%),
as well as in Accident & Health (€+30 million or +21%) and Fine Art & Specie (€+25 million or +11%);
Life & Savings at €95 million. On a comparable basis, Life & Savings gross revenues remained stable as
the underlying business is in run-off.
Underlying earnings before tax reported were €603 million:
Property & Casualty reported earnings were €644 million from underwriting profits mainly driven by
both volume growth and rate increases as well as favorable developments in relation to 4Q18
catastrophe losses, partly offset by elevated levels of large non-catastrophe losses in the first half of 2019,
as well as a significant net investment income combined with the emergence of expense synergies
related to the integration of XL Group within AXA Group;
Life & Savings reported earnings were €7 million;
Other reported earnings were €-48 million mainly driven by interest expenses on financing debt.
Income tax expenses reported were €-100 million, reflecting positive pre-tax underlying earnings.
Minority interests reported were €-2 million.
Underlying earnings reported were €502 million.
Adjusted earnings reported were €547 million, reflecting underlying earnings (€502 million) as well as net
realized capital gains mainly on fixed-income assets and equity instruments.
Net income reported was €394 million, reflecting adjusted earnings (€547 million), integration and restructuring
costs (€-82 million) linked to the integration of XL Group within AXA Group, exceptional operations (€-45 million)
due to the repurchase of financing debt and the amortization of intangible assets (€-20 million) related to
distribution networks.
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United States
(in Euro million, except percentages) June 30,
2019 (a)
June 30,
2018
December 31,
2018
Gross revenues (b) 4,297 7,923 16,483
Life & Savings 3,629 6,577 13,723
Health 14 26 54
Other (c) 654 1,321 2,706
New business
APE 524 821 1,471
NBV Margin 20.0% 22.8% 23.0%
Underlying earnings before tax 749 1,897
Life & Savings 509 1,431
Health (12) (30)
Other (c) 252 496
Income tax expenses / benefits (136) (272)
Minority interests (149) (500)
Income from affiliates and associates (a) 283 - -
Underlying earnings Group share 283 465 1,125
Net capital gains or losses attributable to shareholders net of income tax (3) 3 (11)
Adjusted earnings Group share 280 467 1,114
Profit or loss on financial assets (under fair value option) and derivatives 4 (59) (82)
Exceptional operations (including discontinued operations) (22) (19) 16
Goodwill and other related intangible impacts (0) (0) (3,006)
Integration and restructuring costs (5) (27) (27)
NET INCOME GROUP SHARE 257 363 (1,986)
Health Combined Ratio 150.1% 169.6%
Protection Combined Ratio 108.3% 106.2%
Average exchange rate : € 1.00 = US Dollar 1.13 1.21 1.18
(a) Following the deconsolidation of AXA Equitable Holdings, Inc. and its subsequent accounting under the equity method, the United States underlying earnings contribution was fully
accounted for in Income from affiliates and associates.
(b) Net of intercompany eliminations.
(c) Other corresponds to asset management activities and holding.
The results of our US segment are presented herein on the basis of IFRS and are not, and should not be relied
upon as representing, the US GAAP results of AXA Equitable Holdings, Inc. (“EQH”) (including AllianceBernstein),
which, as a US public company, reports in US GAAP in accordance with the rules of the US Securities and Exchange
Commission (“SEC”). For further information on EQH’s financial results and other public reports please consult
the SEC website (www.sec.gov).
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UNITED STATES - LIFE & SAVINGS
(in Euro million, except percentages) June 30,
2019 (a)
June 30,
2018
December 31,
2018
Gross revenues (b) 3,643 6,602 13,777
Life & Savings 3,629 6,577 13,723
Health 14 26 54
New business
APE 524 821 1,471
NBV Margin 20.0% 22.8% 23.0%
Underlying earnings before tax 417 1,206
Life & Savings 509 1,431
Health (12) (30)
Other (80) (195)
Income tax expenses / benefits (76) (149)
Minority interests (25) (203)
Income from affiliates and associates (a) 198 - -
Underlying earnings Group share 198 316 853
Net capital gains or losses attributable to shareholders net of income tax (3) 3 (11)
Adjusted earnings Group share 195 319 842
Profit or loss on financial assets (under fair value option) and derivatives 4 (59) (82)
Exceptional operations (including discontinued operations) (20) (20) 19
Goodwill and other related intangible impacts (0) (0) (1,057)
Integration and restructuring costs (5) (27) (26)
NET INCOME GROUP SHARE 175 213 (305)
Health Combined Ratio 150.1% 169.6%
Protection Combined Ratio 108.3% 106.2%
Average exchange rate : € 1.00 = US Dollar 1.13 1.21 1.18
(a) Following the deconsolidation of AXA Equitable Holdings, Inc. and its subsequent accounting under the equity method, the United States - Life & Savings underlying earnings contribution was fully accounted for in Income from affiliates and associates.
(b) Net of intercompany eliminations.
Following the deconsolidation of AXA Equitable Holdings Inc. and its subsequent accounting under the equity
method, 1H19 Gross revenues include 3 months of operations, while 1H19 APE and 1H19 NBV include 6 months of
operations on Group share basis.
Gross revenues decreased by €2,959 million (-45%) to €3,643 million. On a comparable basis, gross revenues
increased by €225 million (+7%):
Life & Savings (€-2,948 million or -45%) to €3,629 million. On a comparable basis, Life & Savings gross
revenues increased by €225 million (+7%) mainly in Unit-Linked (€+203 million or +10%) from higher sales
of non-GMxB Variable Annuity, partly offset by lower revenues from GMxB Variable Annuity;
Health (€-12 million or -46%) to €14 million. On a comparable basis, Health gross revenues remained
stable.
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APE decreased by €297 million (-36%) to €524 million. On a comparable basis, APE increased by €25 million (+5%)
mostly driven by higher sales of non-GMxB Variable Annuity, partly offset by lower sales of GMxB Variable Annuity
and lower advisory sales in Mutual Funds.
NBV Margin decreased by 2.8 points to 20.0% driven by lower interest rates and less favorable business mix.
Underlying earnings decreased by €118 million (-37%) to €198 million. On a constant exchange rate basis,
underlying earnings decreased by €132 million (-42%) mainly driven by the decrease in AXA Group average
ownership of AXA Equitable Holdings, Inc. from 92.7% in 1H18 to 52.7% in 1H19, following the IPO and subsequent
sell-downs. At constant ownership rate, underlying earnings increased by 7% mainly from both higher investment
and GMxB hedge margins, partly offset by lower Unit-Linked management fees.
Adjusted earnings decreased by €124 million (-39%) to €195 million. On a constant exchange rate basis, adjusted
earnings decreased by €137 million (-43%) mainly driven by lower underlying earnings.
Net income decreased by €38 million (-18%) to €175 million. On a constant exchange rate basis, net income
decreased by €50 million (-23%) driven by lower adjusted earnings, partly offset by a favorable change in the fair
value of mutual funds and interest rate derivatives not eligible for hedge accounting (€+63 million) backing
structured products and lower separation costs (€+23 million) in the context of the IPO and subsequent sell-
downs of AXA Equitable Holdings, Inc.
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UNITED STATES - AB
(in Euro million, except percentages) June 30,
2019 (a)
June 30,
2018
December 31,
2018
Gross revenues (b) 654 1,321 2,706
Underlying earnings before tax 332 691
Income tax expenses / benefits (60) (123)
Minority interests (124) (297)
Income from affiliates and associates (a) 85 - -
Underlying earnings Group share 85 148 271
Net capital gains or losses attributable to shareholders net of income tax - - -
Adjusted earnings Group share 85 148 271
Profit or loss on financial assets (under Fair Value option) and derivatives - - -
Exceptional operations (including discontinued operations) (2) 2 (2)
Goodwill and other related intangibles impacts - - (1,949)
Integration and restructuring costs - - (1)
NET INCOME GROUP SHARE 83 150 (1,681)
Average Assets under Management (in Euro billion) 482 461 467
Asset management fee bps 40.5 40.7
Underlying cost income ratio 71.6% 70.8%
Average exchange rate : € 1.00 = US Dollar 1.13 1.21 1.18
(a) Following the deconsolidation of AXA Equitable Holdings, Inc., the United States - AB underlying earnings contribution was fully accounted for in Income from affiliates and associates.
(b) Net of intercompany eliminations. Gross Revenues amounted to €683 million before intercompany eliminations as of June 30, 2019.
Following the deconsolidation of AXA Equitable Holdings Inc. and its subsequent accounting under the equity
method, 1H19 Gross revenues include 3 months of operations.
Gross revenues decreased by €667 million (-51%) to €654 million. On a comparable basis, gross revenues
decreased by €42 million (-6%) mainly from both lower research service (€-30 million) and management fees
(€-12 million) as a result of adverse market conditions in 4Q18.
Underlying earnings decreased by €63 million (-43%) to €85 million. On a constant exchange rate basis,
underlying earnings decreased by €69 million (-47%) driven by the decrease in AXA Group average ownership of
AXA Equitable Holdings, Inc. from 92.7% in 1H18 to 52.7% in 1H19, following the IPO and subsequent sell-downs.
At constant ownership rate, underlying earnings decreased by €15 million (-10%) reflecting lower research service
and performance fees.
Adjusted earnings decreased by €63 million (-43%) to €85 million. On a constant exchange rate basis, adjusted
earnings decreased by €69 million (-47%).
Net income decreased by €67 million (-45%) to €83 million. On a constant exchange rate basis, net income
decreased by €73 million (-49%) mainly driven by lower adjusted earnings.
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International
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 3,662 3,419 6,535
Life & Savings 645 646 1,285
Property & Casualty 2,042 1,946 3,722
Health 816 695 1,295
Other (b) 159 132 233
New business
APE 129 123 262
NBV Margin 39.8% 34.2% 36.5%
Underlying earnings before tax 292 231 435
Life & Savings 55 43 67
Property & Casualty 184 150 305
Health 21 12 25
Other (c) 31 26 39
Income tax expenses / benefits (61) (43) (92)
Minority interests (32) (25) (47)
Income from affiliates and associates 41 47 104
Underlying earnings Group share 240 210 400
Net capital gains or losses attributable to shareholders net of income tax (2) (1) (4)
Adjusted earnings Group share 238 209 396
Profit or loss on financial assets (under fair value option) and derivatives 8 14 39
Exceptional operations (including discontinued operations) - (20) (17)
Goodwill and other related intangible impacts (12) (8) (29)
Integration and restructuring costs (2) (5) (35)
NET INCOME GROUP SHARE 232 190 355
Property & Casualty Combined Ratio 98.4% 100.1% 100.6%
Health Combined Ratio 98.6% 99.3% 99.6%
Protection Combined Ratio 98.7% 100.2% 98.8%
(a) Net of intercompany eliminations.
(b) Other corresponds to banking activities.
(c) Other corresponds to banking activities and holding.
Scope: (i) Mexico, the Gulf Region, Colombia, Singapore, Turkey, Poland, Morocco, AXA Bank Belgium, Malaysia
Property & Casualty, Luxembourg, the Czech Republic Life & Savings, the Slovak Republic Life & Savings, Greece
and Brazil are fully consolidated; (ii) Russia (Reso), India, Nigeria and Lebanon are consolidated under the equity
method and contribute only to the underlying earnings, adjusted earnings and net income.
Gross revenues increased by €243 million (+7%) to €3,662 million. On a comparable basis, gross revenues
increased by €196 million (+6%) mainly driven by insurance activities (+6%) partly offset by a decrease in banking
revenues (-5%):
Property & Casualty (€+96 million or +5%) to €2,042 million. On a comparable basis, Property & Casualty
gross revenues increased by €127 million (+7%):
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o Mexico (€+39 million or +10%) to €476 million mainly driven by a positive timing impact and new
business in Commercial Property,
o The Gulf Region (€-18 million or -7%) to €260 million mainly driven by a further reduction of the
size of a large Commercial Motor fleet,
o Turkey (€+57 million or +21%) to €257 million mainly in Motor and Commercial Property,
o Colombia (€+44 million or +20%) to €251 million mainly driven by new business in Protection and
Workers’ Compensation,
o Poland (€-16 million or -7%) to €217 million mainly due to lower sales in Personal Motor in line
with softening market trends,
o Morocco (€+12 million or +8%) to €170 million mainly due to new business in Personal Motor and
Commercial Property,
o Malaysia (€-10 million or -8%) to €117 million mainly due to lower sales in Motor reflecting strong
market competition;
Health (€+122 million or +18%) to €816 million. On a comparable basis, Health gross revenues increased
by €80 million (+11%) stemming from volume growth and tariff increases in both Mexico (€+62 million or
+19%) to €410 million and the Gulf Region (€+14 million or +7%) to €211 million;
Life & Savings (€-1 million) to €645 million. On a comparable basis, Life & Savings gross revenues
decreased by €3 million (-1%) mainly in (i) Colombia (€-14 million or -16%) to €71 million mostly due to a
G/A Savings run-off portfolio, and (ii) Poland (€-3 million or -4%) to €71 million mainly driven by lower
sales in Unit-Linked largely compensated by higher sales in Protection, partly offset by (iii) Singapore
(€+15 million or +12%) to €140 million from higher sales across all lines of business;
Other (€+ 27million or +20%) to €159 million. On a comparable basis, Other gross revenues decreased by
€8 million (-5%) at AXA Bank Belgium mainly due to lower net realized capital gains.
APE increased by €6 million (+5%) to €129 million. On a comparable basis, APE increased by €4 million (+3%)
mainly driven by (i) India (€+2 million or +10%) to €21 million from higher sales in Protection with Savings, (ii)
Singapore (€+2 million or +4%) to €49 million from higher sales in both G/A Savings and Unit-Linked, and (iii) Mexico
(€+1 million or +13%) to €13 million reflecting a growth in Protection with Savings.
NBV Margin increased by 5.6 points to 39.8% mainly due to a more favorable product mix, notably within Unit-
Linked, in Singapore.
Underlying earnings before tax increased by €61 million (+26%) to €292 million. On a constant exchange rate
basis, underlying earnings before tax increased by €63 million (+27%):
Property & Casualty (€+34 million or +23%) to €184 million. On a constant exchange rate basis, Property
& Casualty underlying earnings before tax increased by €39 million (+26%) mainly driven by (i) Brazil
(€+14 million) primarily from a more favorable claims experience, (ii) Colombia (€+11 million) mainly
driven by an improved net technical margin in Workers’ Compensation, partly offset by higher acquisition
expenses in line with volume growth, and (iii) Luxembourg (€+6 million) following a more favorable claims
experience;
Life & Savings (€+12 million or +29%) to €55 million. On a constant exchange rate basis, Life & Savings
underlying earnings before tax increased by €11 million (+27%) mainly driven by (i) Mexico (€+8 million)
stemming from a more favorable claims experience, and a higher investment margin as a result of a
higher average asset base, partly offset by higher commissions, and (ii) Poland (€+5 million) from lower
acquisition expenses;
Other (€+6 million or +23%) to €31 million. On a constant exchange rate basis, Other underlying earnings
before tax increased by €6 million (+23%) from Holdings (€+5 million) mainly driven by lower expenses;
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Health (€+9 million or +69%) to €21 million. On a constant exchange rate basis, Health underlying
earnings before tax increased by €7 million (+59%) mainly from (i) the Gulf Region (€+4 million) mainly
driven by higher favorable prior year reserve developments, and (ii) Mexico (€+3 million) as a result of a
higher net technical margin, partly offset by higher expenses.
Income tax expenses increased by €19 million (+44%) to €-61 million. On a constant exchange rate basis, income
tax expenses increased by €19 million (+45%) mainly driven by higher pre-tax underlying earnings.
Minority interests increased by €7 million (+28%) to €-32 million. On a constant exchange rate basis, minority
interests increased by €7 million (+27%) as a result of higher underlying earnings in the Gulf Region and Colombia.
Income from affiliates and associates decreased by €6 million (-12%) to €41 million. On a constant exchange
rate basis, income from affiliates and associates decreased by €3 million (-6%) mainly at Reso.
Underlying earnings increased by €30 million (+14%) to €240 million. On a constant exchange rate basis,
underlying earnings increased by €35 million (+16%).
Adjusted earnings increased by €29 million (+14%) to €238 million. On a constant exchange rate basis, adjusted
earnings increased by €33 million (+16%) mainly driven by higher underlying earnings.
Net income increased by €42 million (+22%) to €232 million. On a constant exchange rate basis, net income
increased by €50 million (+26%) mainly driven by higher adjusted earnings.
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Transversal & Central Holdings
(in Euro million, except percentages) June 30,
2019
June 30, 2018
restated (a)
December 31,
2018
Gross revenues (b) 1,367 1,413 2,684
Life & Savings 2 3 5
Property & Casualty 690 708 1,290
Health 88 71 146
Other (c) 587 631 1,243
Underlying earnings before tax (331) (181) (487)
Life & Savings 0 1 (6)
Property & Casualty 75 100 208
Health (1) (2) (17)
Other (d) (406) (281) (673)
Income tax expenses / benefits 91 90 159
Minority interests (3) (4) (8)
Income from affiliates and associates 11 10 20
Underlying earnings Group share (232) (84) (316)
Net capital gains or losses attributable to shareholders net of income tax 35 1 (13)
Adjusted earnings Group share (196) (84) (330)
Profit or loss on financial assets (under fair value option) and derivatives (438) (120) (79)
Exceptional operations (including discontinued operations) (597) (20) (91)
Goodwill and other related intangible impacts (0) (0) (1)
Integration and restructuring costs (22) (12) (64)
NET INCOME GROUP SHARE (1,254) (236) (564)
Property & Casualty Combined Ratio 95.7% 89.9% 89.9%
Health Combined Ratio 100.6% 102.1% 110.4%
(a) Restated: as per new governance.
(b) Net of intercompany eliminations.
(c) Other corresponds to asset management activities. (d) Other corresponds to asset management activities and holding.
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AXA INVESTMENT MANAGERS (“AXA IM”)
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 587 631 1,243
Underlying earnings before tax 167 188 343
Income tax expenses / benefits (51) (55) (85)
Minority interests (3) (4) (8)
Income from affiliates and associates 10 10 19
Underlying earnings Group share 123 139 270
Net capital gains or losses attributable to shareholders net of income tax - - -
Adjusted earnings Group share 123 139 270
Profit or loss on financial assets (under Fair Value option) and derivatives (8) 11 (1)
Exceptional operations (including discontinued operations) (0) (50) (53)
Goodwill and other related intangibles impacts (0) (0) (1)
Integration and restructuring costs (0) (4) (40)
NET INCOME GROUP SHARE 115 96 175
Average Assets under Management (in Euro billion) 649 641 642
Asset management fee bps 16.6 17.2 17.1
Underlying cost income ratio 71.3% 69.7% 72.1%
(a) Net of intercompany eliminations. Gross Revenues amounted to €728 million before intercompany eliminations as of June 30, 2019.
Assets under Management ("AUM") increased by €27 billion from December 31, 2018, to €757 billion at the end
of June 30, 2019, driven by positive market effects mainly linked to lower interest rates (€+28 billion), a positive
foreign exchange rate impact (€+2 billion), and net inflows from Main Fund (€+4 billion) linked to the integration
of XL Group (€+3 billion), partly offset by net outflows from Asian joint ventures (€-6 billion) mainly from the China
subsidiary due to changes in regulatory requirements.
Management fee bps decreased by 0.6 bps to 16.6 bps. On a constant exchange rate basis, management fee bps
decreased by 0.6 bps mainly due to an unfavorable change in product mix.
Gross revenues decreased by €44 million (-7%) to €587 million. On a comparable basis, gross revenues decreased
by €48 million (-8%) mainly driven by lower performance fees (€-14 million), management fees (€-14 million) and
transaction fees (€-13 million).
Underlying earnings before tax decreased by €21 million (-11%) to €167 million. On a constant exchange rate
basis, underlying earnings before tax decreased by €22 million (-12%) as a result of lower gross revenues, partly
offset by lower expenses.
The underlying cost income ratio increased by 1.6 points to 71.3%. On a constant exchange rate basis, the
underlying cost income ratio increased by 1.3 points.
Income tax expenses decreased by €4 million (-7%) to €-51 million.
Income from affiliates and associates remained stable at €10 million.
Underlying earnings and adjusted earnings decreased by €16 million (-12%) to €123 million. On a constant
exchange rate basis, underlying earnings and adjusted earnings decreased by €17 million (-12%).
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Net income increased by €19 million (+20%) to €115 million. On a constant exchange rate basis, net income
increased by €19 million (+20%) mainly driven by the non-repeat of an exceptional tax charge related to the
transfer of AB shares to AXA US in the context of the IPO of AXA Equitable Holdings, Inc. completed in May 2018.
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AXA ASSISTANCE
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Gross revenues (a) 687 680 1,331
Property & Casualty 599 609 1,185
Health 88 71 146
Underlying earnings before tax 13 14 20
Property & Casualty 13 15 36
Health (1) (2) (17)
Income tax expenses / benefits (8) (10) (16)
Minority interests 0 (0) (0)
Income from affiliates and associates 1 1 1
Underlying earnings Group share 5 3 4
Net capital gains or losses attributable to shareholders net of income tax 0 1 (2)
Adjusted earnings Group share 5 5 2
Profit or loss on financial assets (under fair value option) and derivatives 0 (6) (7)
Exceptional operations (including discontinued operations) 1 0 2
Goodwill and other related intangible impacts - - -
Integration and restructuring costs (3) (1) (8)
NET INCOME GROUP SHARE 4 (2) (11)
Property & Casualty Combined Ratio 98.4% 98.1% 97.8%
Health Combined Ratio 100.6% 102.1% 110.4%
(a) Net of intercompany eliminations.
Gross revenues increased by €7 million (+1%) to € 687 million. On a comparable basis, gross revenues increased
by €26 million (+4%):
Property & Casualty (€-10 million or -2%) to €599 million. On a comparable basis, Property & Casualty
gross revenues increased by €11 million (+2%) in Non-Motor (€+21 million or +6%) from higher volumes
mainly in Travel and Home, partly offset by lower volumes in Motor (€-10 million or -4%);
Health (€+17 million or +24%) to €88 million. On a comparable basis, Health gross revenues increased by
€15 million (+21%) mainly due to higher new business.
Underlying earnings before tax decreased by €1 million (-6%) to €13 million:
Property & Casualty (€-2 million or -12%) to €13 million mainly driven by higher commissions from a change
in business mix towards large partnerships, notably in Home, partly offset by lower attritional losses in Motor;
Health (€+1 million or +66%) to €-1 million mainly driven by a decrease in the expense ratio.
Income tax expenses decreased by €2 million (-20%) to €-8 million mainly driven by a lower corporate tax rate
due to a favorable change in country mix.
Underlying earnings increased by €2 million (+51%) to €5 million.
Adjusted earnings remained stable at €5 million as higher underlying earnings were offset by lower net realized
capital gains.
Net income increased by €6 million to €4 million mainly driven by favorable foreign exchange impacts.
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AXA SA
(in Euro million, except percentages) June 30,
2019
June 30,
2018
December 31,
2018
Underlying earnings Group share (401) (298) (703)
Net capital gains or losses attributable to shareholders net of income tax 36 (2) (23)
Adjusted earnings Group share (365) (300) (726)
Profit or loss on financial assets (under fair value option) and derivatives (438) (125) (68)
Exceptional operations (including discontinued operations) (596) 58 (16)
Goodwill and other related intangible impacts - - -
Integration and restructuring costs (15) (6) (9)
NET INCOME GROUP SHARE (1,414) (373) (819)
Underlying earnings decreased by €103 million to €-401 million mainly driven by (i) temporary higher financial
charges, notably in the context of the acquisition of XL Group, the change in the accounting methodology of the
mandatory exchangeable bonds triggered by the deconsolidation of AXA Equitable Holdings, Inc. (“EQH”) and
hedges protecting the value of EQH, as well as (ii) higher tax paid mostly related to the timing of dividends
received from subsidiaries.
Adjusted earnings decreased by €66 million to €-365 million mainly driven by lower underlying earnings, partly
offset by the positive impact of derivatives set up to reduce the Group exposure to equities.
Net income decreased by €1,041 million to €-1,414 million mainly due to (i) the negative impact linked to the
deconsolidation of AXA Equitable Holdings, Inc. (€-0.6 billion), (ii) an unfavorable change in the fair value of
derivatives not eligible for hedge accounting, and (iii) the non-repeat of the 2018 one-off benefit from the
reimbursement of the tax paid on dividends received from European subsidiaries held for more than 95%
following the decision from the European Court of Justice.
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Outlook
Anticipating the rapidly evolving needs of its customers, AXA’s strategy is articulated around its preferred
segments (P&C Commercial lines, Health and Protection) and a focus on partnerships and innovation, seizing
opportunities arising from new technologies to offer products and services beyond insurance and becoming a
trusted partner for its customers.
AXA is resolutely focused on the delivery of its Ambition 2020 plan and the successful integration of XL Group,
solidifying AXA’s position as the #1 global P&C Commercial lines insurer. The significant shift in the business
profile of the Group is well advanced, leading to a higher proportion of technical margin earnings and a reduced
sensitivity to financial markets. AXA’s Solvency II position and free cash flow generation should remain strong and
resilient to external shocks due to robust underwriting and reinsurance policies, a high quality asset portfolio and
disciplined capital management.
With its clear strategy, a simplified organization designed to foster growth across its preferred segments, a
significant shift in strategic profile and a strong balance sheet with financial flexibility, AXA is well positioned to
create lasting shareholder value and offer an attractive return.
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Glossary
This glossary includes definitions of non-GAAP financial measures, or alternative performance measures
(“APMs”), indicated by an asterisk (*), that Management believes are useful to understand the Group’s business
and analyze the Group’s performance. The scope of the following definitions of APMs remains unchanged
compared to prior periods, except that the scope of certain definitions was updated to take into account (i) the
deconsolidation of EQH and its subsequent remaining ownership accounting using the equity method and (ii) the
impact of the issuance by AXA of mandatory exchangeable bonds into shares of EQH in May 2018, which were
recorded in “shareholders’ equity - Minority interests” and “financial debt” and subsequent reclassification of
Shareholders’ Equity components under financing debt starting 1Q19.
Scope and comparable basis
SPLIT BY GEOGRAPHIES
The split by geographies is detailed below:
France (insurance and banking activities, and holdings);
Europe, consisting of:
o Switzerland (insurance activities),
o Germany (insurance and banking activities, and holdings),
o Belgium (insurance activities and holdings),
o United Kingdom and Ireland (insurance activities and holdings),
o Spain (insurance activities),
o Italy (insurance activities and holdings);
Asia, consisting of:
o Japan (insurance activities and holdings),
o Hong Kong (insurance activities),
o Asia High Potentials, consisting of:
Thailand (insurance activities),
Indonesia (insurance activities),
China (insurance activities),
The Philippines (insurance activities),
o Asia - Direct, consisting of:
Direct Japan (insurance activities),
Direct South Korea (insurance activities),
o Asia Holdings;
AXA XL, consisting of:
o XL Group (insurance activities and holdings) as acquired on September 12, 2018,
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o AXA Corporate Solutions Assurance (insurance activities),
o AXA Art (insurance activities);
United States (insurance activities, AB and holdings);
International, consisting of:
o AXA Bank Belgium (banking activities),
o Brazil (insurance activities and holdings),
o Colombia (insurance activities),
o Czech Republic and Slovak Republic (insurance activities),
o Greece (insurance activities),
o The Gulf Region (insurance activities and holdings),
o India (insurance activities and holdings),
o Lebanon (insurance activities and holdings),
o Luxembourg (insurance activities and holdings),
o Malaysia (insurance activities),
o AXA Mediterranean Holdings,
o Mexico (insurance activities),
o Morocco (insurance activities and holdings),
o Nigeria (insurance activities and holdings),
o Poland (insurance activities),
o Russia (Reso) (insurance activities),
o Singapore (insurance activities and holdings),
o Turkey (insurance activities and holdings);
Transversal & Central Holdings, consisting of:
o AXA Investment Managers,
o AXA Assistance,
o AXA Liabilities Managers,
o AXA Global Re,
o AXA Life Europe,
o AXA SA and other Central Holdings.
CURRENT ENGINES AND HIGH POTENTIALS
The split between current engines and high potentials is detailed below:
Current Engines: Belgium, France, Germany, Hong Kong, Italy, Japan, Spain, Switzerland, UK & Ireland,
AXA XL, the United States and AB;
High Potentials: Brazil, China, Indonesia, Mexico, the Philippines and Thailand.
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COMPARABLE BASIS FOR REVENUES, ANNUAL PREMIUM EQUIVALENT AND NBV MARGIN
“On a comparable basis” means the following:
data for the current period were restated using the prevailing foreign currency exchange rates for the
same period of prior year (constant exchange rate basis);
data in one of the two periods being compared were restated for the results of acquisitions, disposals
and business transfers (constant structural basis) and for changes in accounting principles (constant
methodological basis).
Earnings and Capital
ADJUSTED EARNINGS*
Adjusted Earnings represent the net income (Group share) as disclosed in the table set forth on pages 20 to 22 of
this report, before the impact of the following items net of policyholder participation, deferred acquisition costs,
VBI, taxes and minority interests:
integration and restructuring costs related to material newly acquired companies as well as restructuring
and associated costs related to productivity improvement plans;
goodwill and other related intangibles;
exceptional operations (primarily change in scope and discontinued operations);
profit or loss on financial assets accounted for under fair value option (excluding assets backing liabilities
for which the financial risk is borne by the policyholder), foreign exchange impacts on assets and
liabilities, and derivatives related to invested assets and liabilities.
Derivatives related to invested assets:
include all foreign exchange derivatives, except the ones related to currency options in earnings hedging
strategies which are included in underlying earnings;
exclude derivatives related to insurance contracts evaluated according to the “selective unlocking”
accounting policy; and
exclude derivatives involved in the economic hedging of realized gains and impairments of equity
securities backing General Account and shareholders’ funds, for which cost at inception, intrinsic value
and pay-off flow through adjusted earnings, and only time value flows through net income when there is
no intention to sell the derivatives in the short term (if not, flows through adjusted earnings).
UNDERLYING EARNINGS*
Underlying Earnings correspond to Adjusted Earnings without the following elements net of policyholder
participation, deferred acquisition costs, VBI, taxes and minority interests:
realized gains and losses and change in impairment valuation allowances (on assets not designated
under fair value option or trading assets); and
cost at inception, intrinsic value and pay-off of derivatives used for the economic hedging of realized
gains and impairments of equity securities backing General Account and shareholders’ funds.
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EARNINGS PER SHARE
Earnings per share (EPS) represent AXA's consolidated earnings (net of financial charges related to undated
subordinated debt recorded through shareholders’ equity, preferred shares and mandatory exchangeable bonds
up to the date of deconsolidation of EQH and its subsequent accounting under equity method), divided by the
weighted average number of outstanding ordinary shares.
Diluted earnings per share (diluted EPS) represent AXA's consolidated earnings (net of financial charges related
to undated subordinated debt recorded through shareholders’ equity, preferred shares and mandatory
exchangeable bonds up to the date of deconsolidation of EQH and its subsequent accounting under equity
method), divided by the weighted average number of outstanding ordinary shares, on a diluted basis (i.e.
including the potential impact of all outstanding dilutive stock options being exercised, performance shares, and
conversion of existing convertible debt into shares, provided that their impact is not anti-dilutive).
Underlying Earnings per share* corresponds to Underlying Earnings (net of financial charges related to undated
subordinated debt recorded through shareholders’ equity, preferred shares and mandatory exchangeable bonds
up to the date of deconsolidation of EQH and its subsequent accounting under equity method), divided by the
weighted average number of outstanding ordinary shares.
RETURN ON EQUITY
The Return on Equity (“RoE”) is calculated as earnings divided by the weighted average shareholders’ equity.
The weighted average shareholders’ equity is based on opening shareholders’ equity adjusted for weighted
average impacts of capital flows (including dividends).
for underlying RoE and adjusted RoE*:
o reserves relating to the change in the fair value through shareholders’ equity are excluded from
the average shareholders’ equity,
o undated subordinated debts (“Super Subordinated Debts” TSS/“Undated Subordinated Debts”
TSDI) are treated as financing debt, thus excluded from the average shareholders’ equity,
o and earnings include interest charges on TSS/TSDI, on preferred shares, and on shareholders’
equity component of the mandatory exchangeable bonds up to the date of deconsolidation of
EQH and its subsequent accounting under equity method;
for net income RoE: calculation is based on consolidated financial statements, i.e.
o average shareholders’ equity including undated subordinated debt (TSS/TSDI) and reserves
relating to the change in the fair value through shareholders’ equity,
o and net income.
FREE CASH FLOWS
Free Cash Flows are defined as a measure of dividend capacity calculated as the sum of earnings and required
capital change.
EOF (ELIGIBLE OWN FUNDS)
Surplus derived from a Solvency II balance sheet. It is defined as the excess of market value of assets over best
estimate liabilities and Risk Margin as per Solvency II regulation.
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SOLVENCY II RATIO
This ratio is calculated as per Solvency II, and is equal to the total amount of the Group’s Eligible Own Funds
(“EOF”) divided by the Group’s Solvency Capital Requirement (“SCR”). The solvency capital requirement, i.e., the
denominator of the Solvency II ratio, is set at a level ensuring that insurers and reinsurers are able to meet their
obligations towards policyholders and beneficiaries over the next 12 months, with a 99.5% probability. The
solvency capital requirement can be calculated either based on the standard formula or an internal model. The
Group is using an internal model.
The Solvency II ratio is estimated primarily using AXA’s internal model calibrated based on an adverse 1/200 years
shock and assuming equivalence for AXA Equitable Holdings, Inc. in the US. For further information on AXA’s
internal model and Solvency II disclosures, please refer to AXA Group’s SFCR for FY 2018, available on AXA’s
website (www.axa.com). As in previous disclosures all AXA US entities are taken into account assuming US
equivalence. The contribution to the AXA Group Solvency II ratio from the entities that were part of the XL Group
(“XL entities”) as of December 31, 2018, was calculated in accordance with the equivalence regime, based on the
Bermudian Standard Formula SCR, plus a 5% add-on required by the AXA’s lead supervisor (ACPR), as a
transitional measure. In compliance with the ACPR’s decision, from January 1, 2019, XL entities have been fully
consolidated for Solvency II purposes (as per the consolidation-based method set forth in the Solvency II
Directive) and their contribution to the Group’s solvency capital requirement has been calculated using the
Solvency II standard formula. Subject to the prior approval of the ACPR, the Group intends as soon as FY 2020 to
extend its internal model to XL entities.
DEBT GEARING*
Debt Gearing refers to the level of a company's debt related to its equity capital, usually expressed as a
percentage. Debt Gearing is used by Management to measure the financial leverage of the Group and the extent
to which its operations are funded by creditors as opposed to shareholders. AXA’s Debt Gearing is calculated by
dividing the gross debt (financing debt and undated subordinated debt) by total capital employed (consolidated
shareholders’ equity excluding undated subordinated debt and reserves relating to the change in the fair value of
financial instruments and of hedge accounting derivatives plus gross debt). Furthermore, following the
deconsolidation of EQH and its subsequent accounting under the equity method, for 1H19 mandatory
exchangeable bonds issued by AXA in May 2018 were excluded from the Debt Gearing.
Activities
INSURANCE
LIFE & SAVINGS HYBRID AND G/A CAPITAL LIGHT PRODUCTS
Hybrid products: Savings products allowing clients to invest in both Unit-Linked and General Account funds.
G/A capital light products: General Account Savings products which, at inception, create more EOF than the
economic capital they consume.
LIFE & SAVINGS NET INFLOWS
Life & Savings Net Inflows are defined as the collected premiums (including risk premiums, fees and revenues),
net of surrenders, maturities, claims paid and other benefits paid. This definition is applicable to all Life and
Savings products as well as Life-like Health products, with the exception of Mutual Funds products.
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NEW BUSINESS APE (NEW BUSINESS ANNUAL PREMIUM EQUIVALENT)
It represents 100% of new regular premiums plus 10% of single premiums, in line with EEV methodology. APE is
Group share.
NBV (NEW BUSINESS VALUE)
The value of newly issued contracts during the current year. It consists of the present value of future profits after
the costs of acquiring business, less (i) an allowance for the time value of financial option and guarantees, (ii) cost
of capital and non-financial risks. AXA calculates this value net of tax.
NBV MARGIN (NEW BUSINESS VALUE MARGIN)
New Business Value Margin is the ratio of:
New Business Value representing the value of newly issued contracts during the current year; to
Annual Premium Equivalent.
This ratio represents the profitability of the new business.
MARGIN ANALYSIS
The Margin Analysis is presented on an underlying earnings basis.
Even though the presentation of the Margin Analysis is not the same as the Statement of Income (underlying
basis), it is based on the same GAAP measures as used to prepare the Statement of Income in accordance with
IFRS.
Underlying investment margin includes the following items:
net investment income; and
interests and bonuses credited to policyholders and unallocated policyholder bonuses (and the change
in specific reserves purely linked to invested assets returns) related to the net investment income as well
as the unwind of the discount rate used in calculating technical reserves.
Underlying fees & revenues include:
revenues derived from mutual fund sales (which are part of consolidated revenues);
loadings charged to policyholders (or contractual charges) on premiums of all Life & Savings products;
loadings on deposits received on all Life & Savings products and fees on funds under management for
separate account (Unit-Linked) business;
deferred income such as capitalization net of amortization of URR (Unearned Revenue Reserve) and UFR
(Unearned Fee Reserve); and
other fee revenues, e.g., fees received on financial planning or sales of third party products.
Underlying net technical margin includes the following components:
mortality and morbidity margin: the difference between income or earned premiums for assuming risk
and the cost of benefits and claims charges directly linked to the claims experience or its anticipation
(death or disability);
surrender margin: the difference between the benefit reserve and the surrender value paid to the
policyholder in the event of early contract termination;
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GMxB (Variable Annuity guarantees) active financial risk management: the net result from GMxB lines
corresponding to explicit charges related to these types of guarantees less cost of hedging. It also
includes the unhedged business result;
policyholder bonuses if the policyholders participate in the risk margin;
ceded reinsurance results;
other changes in claims and insurance reserves: all the reserve strengthening or release coming from
changes in valuation assumptions, claims experience, additional reserves for mortality risk and other
technical impacts such as premium deficiencies net of derivatives if any; and
claims handling costs.
Underlying expenses include the following components:
acquisition expenses, including commissions and general expenses allocated to new business;
capitalization of acquisition expenses linked to new business: Deferred Acquisition Costs (DAC) and net
rights to future management fees only for investment contracts without DPF;
amortization of Deferred Acquisition Costs (DAC) and net rights to future management fees for
investment contracts without DPF, including the impact of interest capitalized;
administrative expenses; and
policyholder bonuses if the policyholder participates in the expenses of the Company.
Underlying VBI amortization includes VBI (Value of Purchased Life Business In-force) amortization related to
underlying margins.
There are certain material differences between the detailed line-by-line presentation in the Statement of Income
and the components of Life & Savings Margin Analysis as set out below:
For insurance contracts and investment contracts with Discretionary Participation Features (DPF):
o gross premiums (net of deposits), fees and other revenues are allocated in the Margin Analysis
based on the nature of the revenue between “Fees & Revenues” and “Net Technical Margin”,
o policyholders’ interest in participating contracts is reflected as a change in insurance benefits in
the Statement of Income. In the Margin Analysis, it is allocated to the related margin, i.e.
primarily “Investment Margin” and “Net Technical Margin”,
o the “Investment margin” represents the net investment result in the Statement of Income and
is adjusted to consider the related policyholder participation (see above) as well as changes in
specific reserves linked to invested assets’ returns and to exclude the fees on (or contractual
charges included in) contracts with the financial risk borne by policyholders, which are included
in “Fees & Revenues”,
o change in URR (Unearned Revenue Reserve – capitalization net of amortization) is presented in
the line “Change in unearned premiums net of unearned revenues and fees” in the underlying
Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin Analysis;
For investment contracts without DPF:
o deposit accounting is applied. As a consequence, fees and charges related to these contracts are
presented in the Underlying Statement of Income within Gross Consolidated Revenues on a
separate line, and in Margin Analysis in the lines “Fees & Revenues” and “Net Technical Margin”,
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o change in UFR (Unearned Fee Reserve - capitalization net of amortization) is presented in the
line “Change in unearned premiums net of unearned revenues & fees” in the Underlying
Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin Analysis.
INSURANCE RATIOS (APPLICABLE TO PROPERTY & CASUALTY, HEALTH AND PROTECTION ACTIVITIES)
Current accident year loss ratio net of reinsurance is the ratio of:
current year claims charge gross of reinsurance + claims handling costs + result of reinsurance ceded on
current accident year, excluding for the discounted reserves the unwind of the discount rate used in
calculating technical reserves; to
earned revenues gross of reinsurance.
All accident year loss ratio net of reinsurance is the ratio of:
all accident years claims charge gross of reinsurance + claims handling costs + result of reinsurance
ceded on all accident years excluding unwind of the discount rate used in calculating technical reserves;
to
earned revenues gross of reinsurance.
Underlying expense ratio is the ratio of:
underlying expenses (excluding claims handling costs, including changes in VBI amortization); to
earned revenues gross of reinsurance.
Underlying expenses include two components: expenses (including commissions) related to acquisition of
contracts (with the related acquisition expense ratio) and all other expenses excluding claims handling costs
(with the related administrative expense ratio). Underlying expenses exclude customer intangible amortization,
but include the impact from the changes in VBI amortization.
The Underlying Combined ratio* is the sum of the all accident year loss ratio and the underlying expense ratio.
ASSET MANAGEMENT
Net inflows: Inflows of client money less outflows of client money. Net inflows are used by the Management to
measure the impact of sales efforts, product attractiveness (mainly dependent on performance and innovation),
and the general market trend in investment allocation.
Underlying cost income ratio is the ratio of:
general expenses excluding distribution related expenses; to
gross revenues excluding distribution fees received.
Assets under management (AUM) are defined as the assets whose management has been delegated by their
owner to an asset management company such as AXA Investment Managers and AB. AUM only includes funds and
mandates which generate fees and exclude double counting.
BANKING
Operating net banking revenues are disclosed before intercompany eliminations and before realized capital
gains/losses or changes in fair value of “fair-value-P&L” assets and of hedging derivatives.
II. Consolidated Financial statements
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Half Year 2019
Table of Contents
II.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...................................................................................... 79
II.2 CONSOLIDATED STATEMENT OF INCOME ............................................................................................................ 81
II.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .............................................................................. 82
II.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY........................................................................................ 83
II.5 CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................................... 85
NOTE 1 ACCOUNTING PRINCIPLES ......................................................................................................................... 87
NOTE 2 SCOPE OF CONSOLIDATION ...................................................................................................................... 89
NOTE 3 CONSOLIDATED STATEMENT OF INCOME BY SEGMENT ........................................................................... 93
NOTE 4 TRANSACTIONS IN CONSOLIDATED ENTITIES .......................................................................................... 96
NOTE 5 INVESTMENTS .......................................................................................................................................... 100
NOTE 6 SHAREHOLDERS’ EQUITY AND MINORITY INTERESTS ............................................................................ 108
NOTE 7 FINANCING DEBT ...................................................................................................................................... 115
NOTE 8 NET INCOME PER ORDINARY SHARE ....................................................................................................... 116
NOTE 9 SUBSEQUENT EVENTS ............................................................................................................................. 117
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II.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes (in Euro million)
June 30,
2019
December 31,
2018
Goodwill 16,855 16,771
Value of purchased business in force (a) 1,663 2,087
Deferred acquisition costs and equivalent 15,672 26,415
Other intangible assets 4,738 5,041
Intangible assets 38,929 50,313
Investments in real estate properties 21,429 20,939
Financial investments 481,413 525,338
Assets backing contracts where the financial risk is borne by policyholders (b) 68,961 160,176
5 Investments from insurance activities 571,804 706,452
5 Investments from banking and other activities 43,585 41,809
Investments accounted for using the equity method 7,057 2,929
Reinsurers' share in insurance and investment contracts liabilities 22,170 25,751
Tangible assets 2,959 1,599
Deferred policyholders' participation assets - 303
Deferred tax assets 661 915
Other assets 3,620 2,817
Receivables arising from direct insurance and inward reinsurance operations 28,642 25,259
Receivables arising from outward reinsurance operations 2,269 1,944
Receivables - current tax 909 962
Other receivables 11,638 14,745
Receivables 43,459 42,911
4 Assets held for sale (c) 9,219 26,384
Cash and cash equivalents 23,666 31,329
TOTAL ASSETS 763,509 930,695
Note: All invested assets are shown net of related derivative instruments impact.
(a) Amounts are gross of tax.
(b) Includes assets backing contracts where the financial risk is borne by policyholders with Guaranteed Minimum features.
(c) Amounts included the assets relating to the Group Life portfolio in Switzerland, AXA Life Europe and AXA Wealth Management (HK) Limited for which the disposal processes were not finalized at periods-end.
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Notes (in Euro million)
June 30,
2019
December 31,
2018
Share capital and capital in excess of nominal value 26,040 26,044
Reserves and translation reserve 38,352 34,244
Net consolidated income - Group share 2,333 2,140
Shareholders’ equity – Group share 66,725 62,428
Minority interests 5,538 10,824
6 TOTAL SHAREHOLDERS' EQUITY 72,263 73,252
Subordinated debt 11,368 10,876
Financing debt instruments issued 1,647 5,096
Financing debt owed to credit institutions - -
7 Financing debt (a) 13,015 15,971
Liabilities arising from insurance contracts 374,868 437,015
Liabilities arising from insurance contracts where the financial risk is borne by policyholders (b) 53,902 146,058
Total liabilities arising from insurance contracts 428,769 583,073
Liabilities arising from investment contracts with discretionary participating features 34,561 34,225
Liabilities arising from investment contracts with no discretionary participating features 914 4,837
Liabilities arising from investment contracts with discretionary participating features and where the financial risk is borne by policyholders
3,008 2,785
Liabilities arising from investment contracts with no discretionary participating features and where the financial risk is borne
by policyholders 12,588 11,747
Total liabilities arising from investment contracts 51,071 53,593
Unearned revenue and unearned fee reserves 2,174 2,722
Liabilities arising from policyholder participation and other obligations 53,848 40,625
Derivative instruments relating to insurance and investment contracts (877) (1,795)
Liabilities arising from insurance and investment contracts 534,986 678,219
Liabilities arising from banking activities (a) 38,890 36,054
Provisions for risks and charges 9,578 11,363
Deferred tax liabilities 5,397 4,621
Minority interests of consolidated investment funds and puttable instruments held by minority interest holders 7,609 6,796
Other debt instruments issued, notes and bank overdrafts (a) 4,472 7,104
Payables arising from direct insurance and inward reinsurance operations 9,251 10,307
Payables arising from outward reinsurance operations 12,201 11,488
Payables – current tax 1,461 940
Collateral debts relating to investments under lending agreements or equivalent 32,761 32,814
Other payables 14,579 17,048
Payables 82,334 86,498
4 Liabilities held for sale (c) 7,045 24,718
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 763,509 930,695
(a) Amounts are shown net of related derivative instruments impact.
(b) Includes liabilities arising from contracts where the financial risk is borne by policyholders with Guaranteed Minimum features.
(c) Amounts included the liabilities relating to the Group Life portfolio in Switzerland, AXA Life Europe and AXA Wealth Management (HK) Limited, for which the disposal processes were not
finalized at periods-end.
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II.2 CONSOLIDATED STATEMENT OF INCOME
Notes (in Euro million, except EPS in Euro)
June 30,
2019
June 30,
2018
Gross written premiums 55,684 50,381
Fees and charges relating to investment contracts with no participating features 121 122
Revenues from insurance activities 55,805 50,503
Net revenues from banking activities 226 233
Revenues from other activities 1,918 2,863
Revenues (a) 57,949 53,600
Change in unearned premiums net of unearned revenues and fees (5,203) (4,378)
Net investment income (b) 5,756 7,044
Net realized gains and losses relating to investments at cost and at fair value through shareholders' equity (c) 418 1,195
Net realized gains and losses and change in fair value of investments at fair value through profit and loss (d) 15,786 (133)
of which change in fair value of assets with financial risk borne by policyholders (e) 15,154 839
Change in investments impairments (f) (91) (324)
Net investment result excluding financing expenses 21,869 7,781
Technical charges relating to insurance activities (e) (58,214) (41,721)
Net result from outward reinsurance (689) (368)
Bank operating expenses (31) (35)
Acquisition costs (6,718) (5,472)
Amortization of the value of purchased business in force (31) (34)
Administrative expenses (5,541) (4,986)
Change in goodwill impairment and other intangible assets impairment and amortization (79) (53)
Other income and expenses 68 (134)
Other operating income and expenses (71,235) (52,804)
Income from operating activities before tax 3,380 4,200
Income (net of impairment) from investment accounted for using the equity method 260 130
Financing debts expenses (g) (433) (178)
Net income from operating activities before tax 3,208 4,151
Income tax (636) (795)
4 Net operating income 2,572 3,356
4 Net loss on held for sale Group Life portfolio in Switzerland (h) - (347)
Net consolidated income after tax 2,572 3,009
Split between :
Net consolidated income - Group share 2,333 2,796
Net consolidated income - Minority interests 239 213
8 Earnings per share 0.92 1.13
8 Fully diluted earnings per share 0.92 1.12
(a) Gross of reinsurance.
(b) Net of investment management costs and including gains/losses from derivatives hedging variable annuities. (c) Includes impairment releases on investments sold and the loss related to AXA Equitable Holdings, Inc. deconsolidation and the fair value revaluation of the investment retained (See
Note 4.1).
(d) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareholders' equity.
(e) Change in fair value of assets with financial risk borne by policyholders is offset by a balancing entry in technical charges relating to insurance activities.
(f) Excludes impairment releases on investments sold.
(g) Includes net balance of income and expenses related to derivatives on financing debt (nonetheless excludes change in fair value of these derivatives).
(h) As of June 30, 2018, mainly related to VBI impairment associated to the Group Life portfolio in Switzerland classified as held for sale.
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II.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in Euro million)
June 30,
2019
June 30,
2018
Reserves relating to changes in fair value through shareholders' equity 6,404 (2,545)
Translation reserves (347) 948
Items that may be reclassified subsequently to Profit or Loss 6,057 (1,597)
Employee benefits actuarial gains and losses (402) 404
Reserves relating to changes in fair value of financial liabilities measured at fair value through profit and loss that
are attributable to changes in own credit risk (16) 13
Items that will not be reclassified subsequently to Profit or Loss (418) 417
Net gains and losses recognized directly through shareholders' equity 5,639 (1,181)
Net consolidated income 2,572 3,009
Split between:
Net consolidated income - Group share 2,333 2,796
Net consolidated income - Minority interests 239 213
TOTAL COMPREHENSIVE INCOME (CI) 8,211 1,829
Split between:
Total comprehensive income - Group share 7,582 1,954
Total comprehensive income - Minority interests 629 (125)
Amounts are presented net of tax, policyholders’ participation and other shadow accounting related movements.
Tax, policyholder participation and related effects are further detailed in the Notes to the Consolidated Financial
statements.
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II
II.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to shareholders
Minority
interests
Share Capital Other reserves
Shareholders'
equity Group
share
(in Euro million, except for number of shares and nominal value)
Number of
shares (in
thousands)
Nominal
value (in
Euro)
Share
Capital
Capital
in
excess
of nominal
value
Treasury
shares
Reserves
relating to
the change
in fair value
of financial instruments
available
for sale
Reserves
relating to
the change
in fair
value of
hedge accounting
derivatives
(cash flow
hedge)
Other
(a)
Translation
reserves
Undistributed
profits and
other reserves (c)
Shareholders' equity opening January 1, 2019 2,424,917 2.29 5,553 21,894 (1,038) 11,566 302 6,776 (2,395) 19,770 62,428 10,824
Capital (9,954) 2.29 (23) - - - - - - - (23) -
Capital in excess of nominal value - - - (229) - - - - - - (229) -
Equity - share based compensation - - - 17 - - - - - - 17 -
Treasury shares - - - - 353 - - - - - 353 -
Others reserves - transaction on treasury shares - - - - - - - (121) - - (121) -
Equity component of compound financial instruments - - - - - - - - - - - (614)
Undated subordinated debt - - - - - - - 0 - - 0 -
Financial expenses - Undated subordinated debt - - - - - - - - - (98) (98) -
Others (including impact on change in scope) (b) - - - - - 0 (0) - (0) 4 4 (5,301)
Dividends paid - - - - - - - - - (3,189) (3,189) -
Impact of transactions with shareholders (9,954) 2.29 (23) (212) 353 0 (0) (121) (0) (3,283) (3,286) (5,915)
Reserves relating to changes in fair value through shareholders'
equity - - - - - 6,141 50 - - - 6,191 213
Translation reserves - - - - - - - 13 (541) - (528) 181
Employee benefits actuarial gains and losses - - - - - - - - - (398) (398) (4)
Reserves relating to changes in fair value of financial liabilities
measured at fair value through profit and loss that are attributable
to changes in own credit risk
- - - - - - - - - (16) (16) 0
Net consolidated income - - - - - - - - - 2,333 2,333 239
Total Comprehensive Income (CI) - - - - - 6,141 50 13 (541) 1,919 7,582 629
Shareholders' equity closing June 30, 2019 2,414,962 2.29 5,530 21,682 (685) 17,707 353 6,668 (2,936) 18,405 66,725 5,538
Note: Amounts are presented net of impacts of shadow accounting and its effects on policyholder participation, deferred acquisition costs, and value of business in force.
(a) Mainly undated subordinated debts (TSS, TSDI) (see Note 6.1.1).
(b) Including changes in ownership interest in consolidated subsidiaries without losing control.
(c) Includes the first time application impact of IFRS 16 Leases (€-77 million Group share ) and IFRIC 23 Uncertainty over Income Tax Treatments (€-110 million Group share). AXA has chosen to adopt the new standards retrospectively through the cumulative effect
approach with an adjustment to the opening balance of retained earnings in 2019. Therefore there is no restatement of comparative information for the year 2018.
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Attributable to shareholders
Minority
interests
Share Capital Other reserves
Shareholders'
Equity Group
share
(in Euro million, except for number of shares and nominal value)
Number of
shares (in
thousands)
Nominal
value
(in Euros)
Share
Capital
Capital
in
excess
of nominal
value
Treasury
shares
Reserves
relating to
the change
in fair value
of financial instruments
available
for sale
Reserves
relating to
the change
in fair
value of
hedge accounting
derivatives
(cash flow
hedge)
Other
(a)
Translation
reserves
Undistributed
profits and
other reserves
Shareholders' equity opening January 1, 2018 2,425,236 2.29 5,554 20,904 (1,060) 15,992 272 7,318 (4,142) 24,773 69,611 5,656
Capital (1,889) 2.29 (4) - - - - - - - (4) -
Capital in excess of nominal value - - - (50) - - - - - - (50) -
Equity - share based compensation - - - 16 - - - - - - 16 -
Treasury shares - - - - 29 - - - - - 29 -
Others reserves - transaction on treasury shares - - - - - - - (40) - - (40) -
Equity component of compound financial instruments - - - - - - - - - - - 587
Undated subordinated debt - - - - - - - - - - - -
Financial expenses - Undated subordinated debt - - - - - - - - - (110) (110) -
Others (including impact on change in scope) (b) - - - - - (9) 0 - 5 (2,445) (2,450) 4,947
Dividends paid - - - - - - - - - (2,998) (2,998) -
Impact of transactions with shareholders (1,889) 2.29 (4) (33) 29 (9) 0 (40) 5 (5,554) (5,607) 5,534
Reserves relating to changes in fair value through shareholders'
equity - - - - - (2,409) 5 - - - (2,404) (142)
Translation reserves - - - - - - - 76 832 - 909 40
Employee benefits actuarial gains and losses - - - - - - - - - 641 641 (237)
Reserves relating to changes in fair value of financial liabilities
measured at fair value through profit and loss that are
attributable to changes in own credit risk
- - - - - - - - - 13 13 0
Net consolidated income - - - - - - - - - 2,796 2,796 213
Total Comprehensive Income (CI) - - - - - (2,409) 5 76 832 3,450 1,955 (125)
Shareholders' equity closing June 30, 2018 2,423,347 2.29 5,549 20,870 (1,031) 13,574 277 7,354 (3,304) 22,669 65,959 11,065
Note: Amounts are presented net of impacts of shadow accounting and its effects on policyholder participation, deferred acquisition costs, and value of business in force. (a) Mainly undated subordinated debts (TSS, TSDI), equity components of compounded financial instruments (e.g. convertible bonds) (see Note 6.1.2).
(b) Including changes in ownership interest in consolidated subsidiaries without losing control.
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II.5 CONSOLIDATED STATEMENT OF CASH FLOWS
(in Euro million)
June 30,
2019
June 30,
2018
Operating income including discontinued operations before tax 3,208 4,151
Net amortization expense (a) 777 188
Change in goodwill impairment and other intangible assets impairment (b) 23 -
Net change in deferred acquisition costs and equivalent (1,168) (663)
Net increase / (write back) in impairment on investments, tangible and other intangible assets 89 328
Change in fair value of investments at fair value through profit or loss (16,132) 13
Net change in liabilities arising from insurance and investment contracts (c) 19,495 7,465
Net increase / (write back) in other provisions (d) (238) (6)
Income (net of impairment) from investment accounted for using the equity method (286) (129)
Adjustment of non cash balances included in the operating income before tax 2,561 7,197
Net realized investment gains and losses (39) (1,089)
Financing debt expenses 433 178
Adjustment for reclassification to investing or financing activities 393 (911)
Dividends recorded in profit or loss during the period (1,524) (1,850)
Investment income & expense recorded in profit or loss during the period (e) (4,768) (5,763)
Adjustment of transactions from accrued to cash basis (6,292) (7,614)
Net cash impact of deposit accounting (83) 41
Dividends and interim dividends collected 1,592 2,017
Investment income (e) 7,460 8,264
Investment expense (excluding interests on financing and undated subordinated debts, margin calls and others) (2,175) (1,938)
Net operating cash from banking activities 179 584
Change in operating receivables and payables (2,344) (3,565)
Net cash provided by other assets and liabilities (f) 197 (618)
Tax expenses paid (268) (639)
Other operating cash impact and non cash adjustment (329) (262)
Net cash impact of transactions with cash impact not included in the operating income before tax 4,231 3,883
NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES 4,101 6,706
Purchase of subsidiaries and affiliated companies, net of cash acquired (14) 0
Disposal of subsidiaries and affiliated companies, net of cash ceded (2,673) 92
Net cash related to changes in scope of consolidation (2,688) 92
Sales of debt instruments (f) 30,374 32,586
Sales of equity instruments and non consolidated investment funds (f) (g) 8,580 10,949
Sales of investment properties held directly or not (f) 1,502 786
Sales and/or repayment of loans and other assets (f) (h) 11,790 12,431
Net cash related to sales and repayments of investments (f) (g) (h) 52,246 56,752
Purchases of debt instruments (f) (34,007) (31,644)
Purchases of equity instruments and non consolidated investment funds (f) (g) (9,941) (9,557)
Purchases of investment properties held direct or not (f) (2,155) (1,266)
Purchases and/or issues of loans and other assets (g) (h) (9,962) (11,452)
Net cash related to purchases and issuance of investments (f) (g) (h) (56,064) (53,920)
Sales of tangible and intangible assets 10 1
Purchases of tangible and intangible assets (192) (319)
Net cash related to sales and purchases of tangible and intangible assets (182) (317)
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Increase in collateral payable / Decrease in collateral receivable 132,131 50,506
Decrease in collateral payable / Increase in collateral receivable (132,295) (46,816)
Net cash impact of assets lending / borrowing collateral receivables and payables (164) 3,690
NET CASH PROVIDED / (USED) BY INVESTING ACTIVITIES (6,851) 6,298
Issuance of equity instruments 21 18
Repayments of equity instruments (819) (0)
Transactions on treasury shares 0 (1)
Dividends payout (3,447) (3,323)
Interests on undated subordinated debts paid (117) (131)
Acquisition / sale of interests in subsidiaries without change in control (45) 2,817
Net cash related to transactions with shareholders (4,408) (620)
Cash provided by financial debts issuance 6 5,860
Cash used for financial debts repayments (541) (45)
Interests on financing debt paid (i) (292) (159)
Net interest margin of hedging derivatives on financing debt - 12
Net cash related to Group financing (826) 5,667
NET CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (5,234) 5,048
-
CASH AND CASH EQUIVALENT AS OF JANUARY 1 (j) 30,556 23,196
Net cash provided by operating activities 4,101 6,706
Net cash provided by investing activities (6,851) 6,298
Net cash provided by financing activities (5,234) 5,048
Impact of change in consolidation method and of reclassifications as held for sale (k) (27) (3,447)
Net impact of foreign exchange fluctuations and reclassification on cash and cash equivalents 139 1,669
CASH AND CASH EQUIVALENT AS OF JUNE 30 (j) 22,684 39,469
(a) Includes premiums/discounts capitalization and relating amortization, amortization of investment and owner occupied properties (held directly).
(b) Includes impairment and amortization of intangible assets booked in the context of business combinations.
(c) Includes impact of reinsurance and change in liabilities arising from contracts where the financial risk is borne by policyholders.
(d) Mainly includes change in provisions for risks & charges, for bad debts/doubtful receivables and change in impairment of assets held for sale.
(e) Includes gains/losses from derivatives hedging variable annuities.
(f) Includes related derivatives. (g) Includes equity instruments held directly or by consolidated investment funds as well as non consolidated investment funds.
(h) Includes sales/purchases of assets backing insurance & investment contracts where the financial risk is borne by policyholders.
(i) Includes net cash impact of interest margin relating to hedging derivatives on financing debt.
(j) Net of bank overdrafts.
(k) Amounts included the assets and liabilities of Group Life portfolio in Switzerland, AXA Life Europe and AXA Wealth Management (HK) Limited, for which the disposals processes were not
finalized at periods-end.
(in Euro million)
June 30,
2019
June 30,
2018
Cash and cash equivalents 23,666 40,245
Bank overdrafts (a) (982) (776)
Cash and cash equivalents as of June 30 (b) 22,684 39,469
(a) Included in "Other debt instruments issued and bank overdrafts".
(b) The "Cash and cash equivalents" item excludes cash backing contracts where the financial risk is borne by policyholders (unit-linked contracts).
CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2019
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NOTE 1 ACCOUNTING PRINCIPLES
1.1 General information
AXA SA, a French “Société Anonyme” (the “Company” and together with its consolidated subsidiaries, “AXA” or
the “Group”), is the holding (parent) company for an international financial services group focused on financial
protection. AXA operates principally in Europe, the Americas, Asia and Africa. The list of the main entities included
in the scope of AXA’s consolidated financial statements is provided in Note 2 of the Notes to the consolidated
interim financial statements.
AXA is listed on Euronext Paris Compartment A.
These consolidated interim financial statements including all Notes were set by the Board of Directors on July 31,
2019.
1.2 General accounting principles
AXA’s consolidated interim financial statements are prepared as of June 30.
The consolidated interim financial statements are prepared in compliance with IFRS standards according to IAS
34 – Interim Financial Reporting and interpretations of the IFRS Interpretations Committee that are endorsed by
the European Union before the balance sheet date with a compulsory date published by the IASB of January 1,
2019. For existing and unchanged IFRS standards and interpretations, the accounting policies applied in the
preparation of the consolidated interim financial statements are consistent with those applied in the preparation
of the consolidated financial statements for the year ended December 31, 2018.
The 2019 half year consolidated financial statements should be read in conjunction with the consolidated
financial statements included in the 2018 Annual Report.
IFRS REQUIREMENTS ADOPTED ON JANUARY 1, 2019
IFRS 16 – Leases, published on January 13, 2016 sets out the principles for the recognition, measurement,
presentation and disclosure of leases for both parties to a contract, i.e. the customer (“lessee”) and the supplier
(“lessor”). Under the IFRS 16 model a lessee is required to recognize (i) assets and liabilities for all leases and (ii)
depreciation of lease assets separately from interest on lease liabilities in the income statement. Lessors continue
to classify and account for their leases as (i) operating leases with recognition of the underlying assets; or (ii)
finance leases by derecognizing the underlying asset and recognition of a net investment, similar to the IAS 17
requirements.
The cumulative effect of initially applying IFRS 16 totaled €77 million and was recognized as a negative
adjustment to the opening balance of retained earnings on January 1, 2019. This mainly relates to property leases
for offices. The new standard increased assets of €2.3 billion and liabilities of €2.4 billion as of January 1, 2019.
The difference with the amount of lease commitments given as of December 31, 2018 (€2.6 billion) mainly results
from the discount impact, as the lease liability is calculated as the present value of future lease payments. At the
transition date, discount rates for leases denominated in Euro range from -0.20% to 2.009% depending on their
duration.
As at June 30, 2019, lease liability and lease asset (called “right-of-use”) respectively amounted to €1.6 billion and
€1.5 billion. The evolution compared to January 1, 2019 is mainly explained by the deconsolidation of EQH, which
is now accounted for using the equity method.
As permitted by the standard, lease payments related to short-term leases (i.e leases with a term of less than 12
months) and low-value assets are directly recognized as an expense.
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IFRIC 23 - Uncertainty over tax treatment published on June 7, 2017 clarifies how to account for income tax when
it is unclear whether the tax authority will accept the tax treatment applied in the tax return. The cumulative effect
of initially applying IFRIC 23 totaled €111 million and was recognized as a negative adjustment to the opening
balance of retained earnings on January 1, 2019. Moreover, IFRIC 23 requires Uncertain Tax Position (UTP) to be
presented in current and deferred taxes. Therefore, the amount of UTP existing at January 1, 2019, (€862 million)
was reclassified from provisions for risks and charges to current and deferred taxes. As at June 30, 2019 UTP
amounted to €491 million; the evolution compared to January 1, 2019 is mainly explained by the deconsolidation
of EQH, which is now accounted for using the equity method.
The application of the amendments below as of January 1, 2019 had no material impact on the Group’s
consolidated interim financial statements.
Amendments Publication
date Topic
IAS 28 - Long-term
Interests in Associates
and Joint Ventures
October 12,
2017
Clarification that a company applies IFRS 9 –Financial Instruments
to long-term interests in an associate or joint venture to which the
equity method is not applied but that in substance form part of the
net investment in the associate or joint venture (long-term
interests).
Annual Improvements to
IFRS 2015 - 2017 Cycle
December
12, 2017
Collection of amendments to IFRS in response to issues that are not
part of a major project.
IAS 19 - Employee
Benefits Plan
Amendment, Curtailment
or Settlement
February 7,
2018
The amendments clarify the accounting when a plan amendment,
curtailment or settlement occurs. Indeed, if a plan amendment,
curtailment or settlement occurs, the current service cost and the
net interest for the period after the remeasurement are determined
using the assumptions used for the remeasurement. Amendments
also clarify the effect of a plan amendment, curtailment or
settlement on the requirements regarding the asset ceiling.
PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions.
The half year income tax charge is based on the best estimate of the expected full year tax rate. In preparing the
consolidated interim financial statements, significant judgments made by management in applying the Group’s
accounting policies and the key sources of estimation uncertainty were the same as those applied to the
consolidated financial statements as at the year ended December 31, 2018.
As recommended by IAS 1, assets and liabilities are generally classified globally on the balance sheet in increasing
order of liquidity, which is more relevant for financial institutions than a classification between current and non-
current items. As for most insurance companies, expenses are classified by destination in the income statement.
All amounts in the consolidated statement of financial position, consolidated statement of income, consolidated
statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes
in equity and in the Notes are expressed in Euro million.
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NOTE 2 SCOPE OF CONSOLIDATION
2.1 Consolidated companies
2.1.1 MAIN FULLY CONSOLIDATED COMPANIES
June 30, 2019 December 31, 2018
Change in scope Voting rights
percentage
Group share
of interests
Voting rights
percentage
Group share
of interests
AXA SA and Other Holdings
France
AXA Parent company Parent company
CFP Management 100.00 100.00 100.00 100.00
AXA Services SAS 100.00 100.00 100.00 100.00
Société Beaujon 100.00 100.00 100.00 100.00
AXA China 100.00 100.00 100.00 100.00
AXA Asia 100.00 100.00 100.00 100.00
United States AXA US Holding 100.00 100.00 100.00 100.00
The Netherlands Vinci BV 100.00 100.00 100.00 100.00
France
AXA France IARD 99.92 99.92 99.92 99.92
AXA France Vie 99.77 99.77 99.77 99.77
AXA Protection Juridique 98.52 98.44 98.52 98.44
Avanssur 100.00 100.00 100.00 100.00
AXA France Participations 100.00 100.00 100.00 100.00
Genworth Financial European Group Holdings 100.00 100.00 100.00 100.00
Financial Assurance Company Limited (Genworth) Merged with AXA France Vie - - 100.00 99.77
Financial Insurance Company Limited (Genworth) Merged with AXA France IARD - - 100.00 99.92
AXA Banque 100.00 99.89 100.00 99.89
AXA Banque Financement 65.00 64.93 65.00 64.93
Europe
Germany AXA Versicherung AG 100.00 100.00 100.00 100.00
AXA Lebensversicherung AG 100.00 100.00 100.00 100.00
Deutsche Ärzteversicherung 100.00 100.00 100.00 100.00
AXA Krankenversicherung AG 100.00 100.00 100.00 100.00
Kölnische Verwaltungs AG für Versicherungswerte 100.00 100.00 100.00 100.00
AXA Konzern AG 100.00 100.00 100.00 100.00
AXA Bank AG 100.00 100.00 100.00 100.00
Roland Rechtsschutz-Versicherungs-AG 60.00 60.00 60.00 60.00
United Kingdom & Ireland Guardian Royal Exchange Plc 100.00 99.98 100.00 99.98
AXA UK Plc 100.00 99.98 100.00 99.98
AXA Equity & Law Plc 99.96 99.96 99.96 99.96
AXA Insurance UK Plc 100.00 99.98 100.00 99.98
AXA PPP Healthcare Limited 100.00 99.98 100.00 99.98
Architas Multi-Manager Limited 100.00 100.00 100.00 100.00
AXA Insurance Limited 100.00 99.98 100.00 99.98
AXA Life Europe Limited 100.00 100.00 100.00 100.00
Spain AXA Seguros Generales, S. A. Relution 99.91 99.91 99.90 99.90
AXA Aurora Vida, S. A. de Seguros Relution 99.84 99.84 99.83 99.83
Switzerland AXA Life 100.00 100.00 100.00 100.00
AXA-ARAG Legal Assistance 66.67 66.67 66.67 66.67
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AXA Insurance 100.00 100.00 100.00 100.00
Italy AXA Assicurazioni e Investimenti 100.00 100.00 100.00 100.00
AXA MPS Vita 50.00
+ 1 voting right 50.00
50.00
+ 1 voting right 50.00
AXA MPS Danni 50.00
+ 1 voting right 50.00
50.00
+ 1 voting right 50.00
AXA MPS Financial 50.00
+ 1 voting right 50.00
50.00
+ 1 voting right 50.00
Belgium Ardenne Prévoyante 100.00 100.00 100.00 100.00 AXA Belgium S. A. 100.00 100.00 100.00 100.00
AXA Holdings Belgium 100.00 100.00 100.00 100.00
Touring Assurances S. A. 100.00 100.00 100.00 100.00
Asia
National Mutual International Pty Ltd. 100.00 100.00 100.00 100.00
Japan AXA Japan Holding New company 98.70 98.70 - -
AXA Life Insurance Relution 100.00 98.70 98.69 98.69
AXA Non Life Insurance Co. Ltd. Relution 100.00 98.70 100.00 98.69
Hong Kong AXA China Region Limited 100.00 100.00 100.00 100.00
AXA General Insurance Hong Kong Ltd. 100.00 100.00 100.00 100.00
Indonesia MLC Indonesia 100.00 100.00 100.00 100.00
Thailand AXA Insurance Public Company Limited 99.47 99.47 99.47 99.47
South Korea Kyobo AXA General Insurance Co. Ltd. 99.71 99.71 99.71 99.71
AXA XL
XL Group (a) 100.00 100.00 100.00 100.00
AXA Corporate Solutions Assurance (sub group) 98.75 98.75 98.75 98.75
AXA Art 100.00 100.00 100.00 100.00
International
AXA Mediterranean Holding S. A. 100.00 100.00 100.00 100.00
AXA Bank Belgium (sub group) 100.00 100.00 100.00 100.00
Colombia AXA Colpatria Seguros 51.00 51.00 51.00 51.00
AXA Colpatria Seguros de vida 51.00 51.00 51.00 51.00
Morocco AXA Assurance Maroc 100.00 100.00 100.00 100.00
AXA Al Amane Assurance 100.00 100.00 100.00 100.00
AXA Holding Maroc S. A. 100.00 100.00 100.00 100.00
Turkey AXA Hayat ve Emeklilik A. S. 100.00 100.00 100.00 100.00
AXA Sigorta A. S. 92.61 92.61 92.61 92.61
AXA Turkey Holding W.L.L 100.00 100.00 100.00 100.00
The Gulf Region AXA Cooperative Insurance Company 50.00 34.00 50.00 34.00
AXA Insurance B.S.C.c. 50.00 50.00 50.00 50.00
Greece AXA Insurance A.E. 99.98 99.98 99.98 99.98
Mexico AXA Seguros S.A. de C.V. 100.00 100.00 100.00 100.00
Luxembourg AXA Assurances Luxembourg 100.00 100.00 100.00 100.00 AXA Assurances Vie Luxembourg 100.00 100.00 100.00 100.00
AXA Luxembourg S. A. 100.00 100.00 100.00 100.00
Czech Republic & Slovak Republic AXA Czech Republic Pension Funds 99.99 99.99 99.99 99.99
AXA Czech Republic Insurance 100.00 100.00 100.00 100.00
AXA Slovakia 100.00 100.00 100.00 100.00
Poland AXA Poland 100.00 100.00 100.00 100.00
AXA Poland Pension Funds 100.00 100.00 100.00 100.00
AXA Ubezpieczenia TUIR S.A 100.00 100.00 100.00 100.00
Singapore AXA Financial Services Singapore pte Ltd. 100.00 100.00 100.00 100.00
AXA Life Insurance Singapore 100.00 100.00 100.00 100.00
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AXA Insurance Singapore 100.00 100.00 100.00 100.00
Malaysia AXA Affin General Insurance Berhad 50.00 50.00 50.00 50.00
India AXA India Holding 100.00 100.00 100.00 100.00
Other
AXA Investment Managers (sub group) Dilution 97.64 97.57 97.80 97.73
AXA Global Re 100.00 100.00 100.00 100.00
AXA Assistance SA (sub group) 100.00 100.00 100.00 100.00
Colisée Ré 100.00 100.00 100.00 100.00
(a) XL Group mainly operates in the United States, the United Kingdom, Bermuda, Switzerland, France, Ireland, Singapore, Germany, Australia and Canada.
CONSOLIDATED INVESTMENT FUNDS AND REAL ESTATE COMPANIES
As of June 30, 2019, investment funds represented a total of €125,794 million invested assets (€117,337 million as
of December 31, 2018), corresponding to 290 investment funds mainly in France, Japan, Germany, Switzerland
and Belgium.
In most investment funds (particularly open-ended investment funds), minority interests are presented as
liabilities under “Minority interests of consolidated investment funds”. As of June 30, 2019, these liabilities
amounted to €7,540 million (€6,799 million as of December 31, 2018). Minority interests related to consolidated
investment funds and real estate companies that are classified in shareholders’ equity amounted to €1,512
million as of June 30, 2019 (€2,275 million as of December 31, 2018).
As of June 30, 2019, 26 consolidated real estate companies corresponded to a total of €14,230 million invested
assets (€12,798 million as of December 31, 2018), mainly in France, Germany and Japan.
2.1.2 MAIN INVESTMENTS IN COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD
Companies accounted for using the equity method listed below exclude investment funds and real estate entities:
June 30, 2019 December 31, 2018
Change in scope
Voting
rights
percentage
Group
share of
interests
Voting
rights
percentage
Group
share of
interests
France
Neuflize Vie 39.98 39.98 39.98 39.98
Asia
Philippines AXA Life Insurance Corporation 45.00 45.00 45.00 45.00
Krungthai AXA Life Insurance Company Ltd. 50.00 50.00 50.00 50.00
ICBC-AXA Life Insurance Company Ltd. 27.50 27.50 27.50 27.50
PT AXA Mandiri Financial Services 49.00 49.00 49.00 49.00
AXA Tian Ping 50.00 50.00 50.00 50.00
AXA SPDB Investment Managers Company limited Relution 39.00 38.05 39.00 38.11
United States
AXA Equitable Holdings, Inc. (previously AXA America Holdings, Inc.) From Full Consolidation to Equity Method 40.14 40.14 59.25 59.25
AXA Equitable Life Insurance Company From Full Consolidation to Equity Method - 40.14 100.00 59.25
AB (sub group) From Full Consolidation to Equity Method - 26.16 65.16 38.61
International
Reso Garantia (RGI Holdings B.V.) (Russia) 39.34 39.34 39.34 39.34
Bharti AXA Life (India) 49.00 49.00 49.00 49.00
Bharti AXA General Insurance Company Limited (India) 49.00 49.00 49.00 49.00
AXA Middle East SAL (Lebanon) 51.00 51.00 51.00 51.00
AXA Mansard Insurance plc (Nigeria) 77.79 77.79 77.79 77.79
Other
AXA Investment Managers Asia Holdings Private Limited Relution 49.00 47.81 49.00 47.89
Kyobo AXA Investment Managers Company Limited Relution 50.00 48.79 50.00 48.86
INVESTMENT FUNDS AND REAL ESTATE ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD
As of June 30, 2019, real estate companies accounted for using the equity method amounted to €138 million
invested assets (€157 million as of December 31, 2018) and investment funds accounted for using the equity
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method amounted to €5,524 million invested assets (€4,979 million as of December 31, 2018), mainly in the United
States, France, Belgium, United Kingdom, Japan and Switzerland.
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NOTE 3 CONSOLIDATED STATEMENT OF INCOME BY SEGMENT
AXA’s Chief Executive Officer (CEO), acting as chief operating decision maker, is a member of the Board of
Directors. He is assisted by a Management Committee in the operational management of the Group and by a
group of senior executives, the so-called Partners’ Group, in developing and implementing any strategic
initiatives. The financial information related to AXA's business segments and holding companies reported to the
Board of Directors twice a year is consistent with the presentation provided in the consolidated financial
statements.
Following the completion of the acquisition of XL Group on September 12, 2018, the financial reporting has been
aligned and retroactively restated under seven segments. The CEOs supervising the main geographies
(respectively CEO of AXA France, CEO of AXA in Europe, CEO of AXA in Asia, CEO of AXA XL, CEO of AXA US (until the
loss of control over AXA Equitable Holdings, Inc.), CEO of International) are members of the Management
Committee.
Key transversal entities and Central Holdings are managed alongside these six geographies.
The results of operating activities and non-operating activities are presented on the basis of seven segments:
France, Europe, Asia, AXA XL, the United States, International and Transversal & Central Holdings.
France: The French market consists of in Life & Savings and Property & Casualty activities, AXA Banque France
and French holdings.
Europe: The European market consists of Life & Savings and Property & Casualty activities in Switzerland,
Germany, Belgium, Spain, the United Kingdom & Ireland and Italy. The German bank and the holding companies
in these countries are also included in the segment Europe.
Asia: The Asian market consists of Life & Savings activities in Japan, Hong Kong and Asia High Potentials
(Indonesia, Philippines, Thailand and China) as well as Property & Casualty activities in Hong Kong and Asia High
Potentials (Thailand and China). The Asia-Direct entities (Japan and South Korea) and the holding companies of
Japan and Asia / Pacific are also included in this segment.
AXA XL: The AXA XL market mainly consists of Property & Casualty activities in XL Group, as well as AXA Corporate
Solutions Assurance and AXA Art. XL holdings are also included.
United States: This segment includes Life & Savings activities in the United States, ACS Life Reinsurance, asset
management services offered by AB, and US holdings.
International: The International market consist of Life & Savings and Property & Casualty activities in fourteen
countries within Europe, Middle East, Africa, Latin America as well as in Singapore, in Malaysia and in India. AXA
Bank Belgium and the holding companies in these countries are also included in this segment.
Transversal & Central Holdings: includes transversal entities namely AXA Investment Managers, AXA Global Re,
AXA Assistance, AXA Liabilities Managers and AXA Life Europe, as well as AXA SA and other Central Holdings.
The intersegment eliminations include only operations between entities from different countries and operating
activities. They mainly relate to reinsurance treaties, assistance guarantees recharging, asset management fees
and interests on loans within the Group.
In this document, “Insurance” covers the three insurance activities: Life & Savings, Property & Casualty and
Health.
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3.1 Consolidated Statement of Income by segment
June 30, 2019
(in Euro million) France Europe Asia AXA XL
United
States International
Transversal
& Central
Holdings
Intersegment
Eliminations Total
of which
Insurance
(a)
Gross written premiums 13,469 19,955 4,825 10,522 3,321 3,451 677 (535) 55,684 55,684
Fees and charges relating to investment contracts with no
participating features
1 63 18 - - 39 - - 121 121
Revenues from insurance activities 13,470 20,018 4,843 10,522 3,321 3,490 677 (535) 55,805 55,805
Net revenues from banking activities 58 (0) - - - 161 - 6 226 -
Revenues from other activities 3 175 - 0 1,007 32 921 (219) 1,918 675
Revenues 13,531 20,192 4,843 10,522 4,328 3,684 1,598 (748) 57,949 56,480
Change in unearned premiums net
of unearned revenues and fees (469) (2,686) (55) (1,767) (11) (312) (49) 146 (5,203) (5,203)
Net investment income (b) 2,192 2,475 672 550 (375) 273 24 (55) 5,756 5,348
Net realized gains and losses relating
to investments at cost and at fair
value through shareholders' equity
290 560 113 56 (9) 5 (597) 0 418 1,013
Net realized gains and losses and
change in fair value of other investments at fair value through
profit or loss (c)
3,180 1,087 692 (37) 11,139 232 (504) (3) 15,786 16,407
of which change in fair value of assets
with financial risk borne by
policyholders
3,106 1,146 705 - 9,926 204 68 0 15,154 15,154
Change in investments impairment (14) (39) (21) (7) - (4) (6) - (91) (82)
Net investment result excluding financing expenses
5,649 4,083 1,455 563 10,754 505 (1,082) (57) 21,869 22,686
Technical charges relating to insurance activities
(15,030) (16,355) (4,695) (5,863) (13,600) (2,342) (527) 198 (58,214) (58,214)
Net result from outward reinsurance (164) (186) (16) (476) 93 (161) 7 215 (689) (689)
Bank operating expenses (5) (3) - - - (22) - - (31) -
Acquisition costs (1,535) (2,048) (567) (1,404) (319) (642) (255) 52 (6,718) (6,718)
Amortization of the value of
purchased business in force - (23) (6) - (0) (1) - - (31) (31)
Administrative expenses (805) (1,292) (288) (968) (742) (416) (1,185) 156 (5,541) (3,926)
Change in goodwill impairment and
other intangible assets impairment - (23) (8) (23) (7) (18) (0) - (79) (73)
Other income and expenses (5) (8) 2 (0) (113) 22 261 (92) 68 (28)
Other operating income and
expenses (17,544) (19,938) (5,580) (8,734) (14,689) (3,580) (1,699) 529 (71,235) (69,679)
Income from operating activities
before tax 1,167 1,651 663 584 382 297 (1,232) (131) 3,380 4,284
Income (net of impairment) from
investment accounted for using the
equity method
5 - 98 1 110 33 12 - 260 208
Financing debt expenses (1) (51) (4) (97) (52) (6) (351) 131 (433) (12)
Net income from operating
activities before tax 1,171 1,600 757 488 440 324 (1,571) 0 3,208 4,479
Income tax (296) (341) (128) (92) (39) (58) 320 - (636) (589)
Net operating income 874 1,259 629 396 401 266 (1,252) - 2,572 3,890
Result from discontinued operations
net of tax - - - - - - - - - -
Net consolidated income after tax 874 1,259 629 396 401 266 (1,252) - 2,572 3,890
Split between :
Net consolidated income - Group
share 872 1,207 625 394 257 232 (1,254) 0 2,333 3,712
Net consolidated income - Minority
interests 2 51 4 2 143 34 3 (0) 239 178
(a) Insurance covers the three insurance activities: Life & Savings, Property & Casualty and Health.
(b) Includes gains/losses from derivatives hedging variable annuities within the Life & Savings activity.
(c) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders' equity.
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June 30, 2018
(in Euro million) France Europe Asia AXA XL
United
States International
Transversal
& Central
Holdings
Intersegment
eliminations Total
of
which
Insurance
(a)
Gross written premiums 13,028 21,682 4,339 1,766 5,987 3,235 675 (330) 50,381 50,381
Fees and charges relating to investment
contracts with no participating features 1 66 18 - - 38 - - 122 122
Revenues from insurance activities 13,028 21,748 4,357 1,766 5,987 3,272 675 (330) 50,503 50,503
Net revenues from banking activities 41 12 - - - 168 - 13 233 -
Revenues from other activities 2 138 1 0 1,992 33 961 (264) 2,863 909
Revenues 13,071 21,898 4,358 1,766 7,979 3,473 1,636 (581) 53,600 51,413
Change in unearned premiums net of
unearned revenues and fees (528) (3,264) (1) (392) 51 (254) (61) 72 (4,378) (4,378)
Net investment income (b) 2,354 2,997 670 105 670 266 17 (34) 7,044 6,575
Net realized gains and losses relating to
investments at cost and at fair value
through shareholders' equity
294 626 150 42 74 (1) 9 2 1,195 1,198
Net realized gains and losses and
change in fair value of other investments at fair value through profit
or loss (c)
(425) (462) (190) (41) 1,250 (24) (236) (5) (133) 81
of which change in fair value of assets
with financial risk borne by policyholders (154) (244) (223) - 1,490 (20) (10) 0 839 839
Change in investments impairment (160) (104) (29) (2) (0) (20) (9) - (324) (309)
Net investment result excluding
financing expenses 2,062 3,057 601 104 1,994 220 (219) (38) 7,781 7,545
Technical charges relating to insurance
activities (11,221) (16,428) (3,542) (837) (7,175) (2,121) (550) 152 (41,721) (41,721)
Net result from outward reinsurance (152) (183) (17) (267) 24 (55) 183 98 (368) (368)
Bank operating expenses (3) (3) - - - (29) - - (35) -
Acquisition costs (1,389) (1,983) (554) (157) (562) (613) (229) 15 (5,472) (5,472)
Amortization of the value of purchased
business in force - (21) (11) - (1) (1) - - (34) (34)
Administrative expenses (678) (1,225) (255) (105) (1,341) (405) (1,199) 223 (4,986) (3,004)
Change in goodwill impairment and
other intangible assets impairment - (25) (8) - (3) (18) (0) - (53) (50)
Other income and expenses (2) (7) (21) 0 (266) 19 240 (96) (134) (76)
Other operating income and expenses
(13,444) (19,875) (4,409) (1,366) (9,324) (3,222) (1,555) 391 (52,804) (50,726)
Income from operating activities
before tax 1,161 1,816 548 112 699 217 (199) (156) 4,200 3,854
Income (net of impairment) from
investment accounted for using the equity method
15 1 56 - - 47 10 - 130 119
Financing debts expenses (0) (9) (1) (1) (76) (6) (240) 156 (178) (5)
Net income from operating activities
before tax 1,175 1,808 603 111 624 258 (429) 0 4,151 3,968
Income tax (309) (372) (113) (36) (119) (42) 195 - (795) (609)
Net operating income 866 1,436 491 75 505 217 (233) - 3,356 3,359
Net loss on held for sale Group Life
portfolio in Switzerland (d) - (347) - - - (0) - - (347) (347)
Net consolidated income after tax 866 1,089 491 75 505 216 (233) - 3,009 3,012
Split between : Net consolidated income - Group
share 863 1,054 487 75 363 190 (236) 0 2,796 2,922
Net consolidated income - Minority
interests 3 35 3 1 142 27 3 (0) 213 90
(a) Insurance covers the three insurance activities: Life & Savings, Property & Casualty and Health.
(b) Includes gains/losses from derivatives hedging variable annuities within the Life & Savings activity.
(c) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders' equity.
(d) Mainly related to the VBI impairment related to the Group Life portfolio classified as held for sale.
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NOTE 4 TRANSACTIONS IN CONSOLIDATED ENTITIES
4.1 AXA Equitable Holdings, Inc.
MARCH 25TH SECONDARY COMMON STOCK OFFERING OF AXA EQUITABLE HOLDINGS, INC. AND RELATED SHARE
BUYBACK
On March 25, 2019, AXA completed a secondary public offering of 40,000,000 shares (the “Offering”), at a public
offering price of USD 20.50 per share, of its U.S. subsidiary, AXA Equitable Holdings, Inc. (“EQH”) and the sale to
EQH of 30,000,000 shares (the “Share Buyback”) at the per share price paid by the underwriters in the Offering. In
addition, the underwriters exercised in full the over-allotment option to purchase an additional 6,000,000 EQH
shares.
Net proceeds (1) amounted to USD 1.5 billion or €1.3 billion, corresponding to the sale of 76,000,000 EQH shares in
the Offering, the full exercise of the over-allotment option granted to the underwriters and the Share Buyback.
Following this sale, AXA’s ownership in EQH decreased from 60.1% (2) to 48.3%.
The reduction of its voting rights below 50% combined with the reduction of its Board membership to a minority
share led to the loss of control of AXA over EQH, while continuing to retain a significant influence over its residual
shareholding of EQH. As a result, AXA:
deconsolidated EQH and accounted for its remaining ownership in EQH using the equity method; and
reclassified the equity component of the Mandatory Exchangeable Bonds from non-controlling interests
to financial liability.
The Offering and the Share Buyback resulted in a negative net income impact of €-598 million as detailed in the
table below:
(in Euro million)
Net Proceeds 1,341
Fair value of retained stake in EQH 4,330
Total Fair Value 5,671
Consolidated Book Value 6,269
Net loss upon deconsolidation (598)
o/w revaluation at fair value of retained stake (1,165)
o/w other comprehensive income recycling 1,232
Employee benefits actuarial losses were reclassified from other comprehensive income to retained earnings for
€-512 million.
At the date of the transaction, the retained stake of EQH was adjusted to its fair value. A reconciliation of the
summarized financial information to the carrying amount of the EQH under equity method is as follows:
(1) Net of underwriting discounts and commissions. (2) Including the shares to be delivered on redemption of the mandatory exchangeable bonds into EQH shares, issued by AXA in May 2018.
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(in Euro million)
At the acquisition date
Intangible assets 9,701
Investments 182,473
Other assets 15,731
TOTAL ASSETS 207,905
Liabilities arising from insurance and investment contracts 180,484
Provisions for risks and charges 1,714
Other liabilities 16,742
TOTAL LIABILITIES 198,940
Net asset value 8,965
Net asset value - Group Share 4,330
Intangible assets mainly relate to value of business inforce and are amortized over the life of the portfolio of
contracts.
JUNE 7TH SECONDARY OFFERING OF AXA EQUITABLE HOLDINGS, INC.’S COMMON STOCK
On June 7, 2019, AXA completed a secondary public offering of a further 40,000,000 shares of EQH’s common
stock.
Net proceeds (1) to AXA, corresponding to the sale of 40,000,000 EQH shares, amounted to USD 834 million or €739
million (2). Following this transaction, AXA’s ownership in EQH decreased from 48.3% (3) to 40.1%. In addition, AXA
granted the underwriters a 30-day option to purchase up to an additional 6,000,000 EQH shares.
The net gain of the sale amounted to €1 million. See details below:
(in Euro million)
Net Proceeds 738
Consolidated Book Value 737
Net Income Result 1
o/w other comprehensive income recycling 53
Employee benefits actuarial losses were reclassified from other comprehensive income to retained earnings for
€-4 million.
(1) Net of underwriting discounts and commissions. (2) Not including the proceeds from the potential exercise of the 30-day over-allotment option granted to the underwriters to purchase 6,000,000
EQH shares. (3) Including the shares to be delivered on redemption of the bonds mandatorily exchangeable into EQH shares, issued by AXA in May 2018.
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4.2 Group Life portfolio transformation in Switzerland
On April 10, 2018, AXA entered into an agreement with its main occupational benefits foundations (1) to convert
their business model from a full-value insurance (2) model to a semi-autonomous model (3). As at December 31,
2018, the operations affected by these disposals were treated as held for sale in AXA consolidated financial
statements. On January 1, 2019, AXA Switzerland completed the transformation and most of the related assets
and liabilities have been transferred to the occupational Foundations during the first half of 2019.
Besides, during the first semester of 2019, AXA Switzerland entered in agreement with additional small
occupational benefit foundations to convert their business model from a full insurance value to a semi-
autonomous model on July 1, 2019 and January 1, 2020. Assets and liabilities were classified as held for sale in
AXA’s consolidated financial statements as of June 30, 2019. There was no impact on net income for this operation
as of June 30, 2019.
As such, the major classes of assets and liabilities (net of intercompany balances with other AXA entities)
presented as held for sale related to:
Assets
(in Euro million) June 30,
2019
Investments 660
Cash and cash equivalents 382
Total assets held for sale 1,042
Liabilities
(in Euro million) June 30,
2019
Liabilities arising from insurance and investment contracts 1,042
Total liabilities held for sale 1,042
As of June 30, 2019, Other Comprehensive Income of invested assets in scope of the transaction was nil.
As of June 30, 2019, the consolidated statement of income impact amounted to €+1 million.
(1) Collective group pensions schemes, which are managed by an independent Board. (2) Contract covering the whole offer: guaranted savings and annuit benefits, death and disability benefits, and administration services. (3) Contract covering death and disability benefits, and administration services.
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4.3 AXA to sell AXA Life Europe
On August 1, 2018, AXA received an irrevocable offer from Cinven for the sale of AXA Life Europe. The sale is
expected to take place in the second semester of 2019. The completion of the transaction is subjected to
customary closing conditions, including the receipt of regulatory approvals.
As such, the major classes of assets liabilities (net of intercompany balances with other AXA entities) presented as
held for sale in AXA’s consolidated financial statements as of June 30, 2019:
Assets
(in Euro million)
June 30, 2019
Other intangible assets 316
Investments 5,686
Other assets (1,744)
Cash and cash equivalents 948
Total assets held for sale 5,207
Liabilities
(in Euro million)
June 30,
2019
Liabilities arising from insurance and investment contracts 5,121
Other liabilities 73
Total liabilities held for sale 5,194
As of June 30, 2019, the unrealized gains and losses in the scope of the transaction amounted to €+92 million.
As of June 30, 2019, the consolidated statement of income included an exceptional loss of €-26 million, in addition
to the €-18 million recognized as of December 31, 2018.
4.4 AXA to sell its Swiss Privilege franchise in Hong Kong (AXA Wealth Management (HK) Ltd.)
On December 22, 2017, AXA entered into an agreement with Jeneration Holdings Limited to sell its Swiss Privilege
franchise in Hong Kong, AXA Wealth Management (HK) Limited. However, on March 22, 2019, the transaction was
cancelled by Jeneration Holdings Limited.
AXA is in negotiation with other potential buyers, a new disposal agreement is expected to be finalized in the
second semester. Hence the assets and liabilities remain classified as held for sale as of June 30, 2019. There was
no impact on net income for this operation as of June 30, 2019.
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NOTE 5 INVESTMENTS
5.1 Breakdown of investments
Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or
economic hedges) except derivatives related to macro-hedges shown separately.
June 30, 2019
Investments as per Consolidated Statement of Financial Position
Insurance Other activities Total
(in Euro million)
Fair
value
Carrying
value
% (value
balance
sheet)
Fair
value
Carrying
value
% (value
balance
sheet)
Fair
value
Carrying
value
% (value
balance
sheet)
Investment in real estate properties at amortized cost (a) 28,984 19,950 3.49% 1,734 1,644 3.77% 30,718 21,594 3.51%
Investment in real estate properties designated as at fair
value through profit or loss (b) 1,479 1,479 0.26% - - - 1,479 1,479 0.24%
Macro-hedge and other derivatives - - - - - - - - -
Investment in real estate properties 30,464 21,429 3.75% 1,734 1,644 3.77% 32,197 23,073 3.75%
Debt instruments held to maturity - - - - - - - - -
Debt instruments available for sale 374,335 374,335 65.47% 4,317 4,317 9.90% 378,652 378,652 61.53%
Debt instruments designated as at fair value through profit
or loss (c) 21,776 21,776 3.81% 130 130 0.30% 21,906 21,906 3.56%
Debt instruments held for trading 121 121 0.02% 0 0 0.00% 121 121 0.02%
Debt instruments (at cost) that are not quoted in an active
market (d) 10,326 9,992 1.75% 1,187 1,188 2.72% 11,514 11,179 1.82%
Debt instruments 406,559 406,224 71.04% 5,634 5,634 12.93% 412,193 411,858 66.93%
Equity instruments available for sale 17,087 17,087 2.99% 1,655 1,655 3.80% 18,742 18,742 3.05%
Equity instruments designated as at fair value through profit
or loss (b) 8,388 8,388 1.47% 592 592 1.36% 8,980 8,980 1.46%
Equity instruments held for trading (0) (0) 0.00% 3 3 0.01% 3 3 0.00%
Equity instruments 25,475 25,475 4.46% 2,250 2,250 5.16% 27,725 27,725 4.51%
Non consolidated investment funds available for sale 7,804 7,804 1.36% 106 106 0.24% 7,910 7,910 1.29%
Non consolidated investment funds designated as at fair value through profit or loss (b)
5,978 5,978 1.05% 20 20 0.05% 5,998 5,998 0.97%
Non consolidated investment funds held for trading 30 30 0.01% - - - 30 30 0.00%
Non consolidated investment funds 13,811 13,811 2.42% 126 126 0.29% 13,937 13,937 2.26%
Other assets designated as at fair value through profit or
loss, held by consolidated investment funds 16,347 16,347 2.86% 262 262 0.60% 16,608 16,608 2.70%
Macro-hedge and other derivatives (217) (217) -0.04% (405) (405) -0.93% (622) (622) -0.10%
Sub total Financial instruments (excluding Loans) 461,975 461,640 80.73% 7,867 7,867 18.05% 469,842 469,507 76.29%
Loans held to maturity - - - - - - - - -
Loans available for sale (0) (0) 0.00% 0 0 0.00% 0 0 0.00%
Loans designated as at fair value through profit or loss (b) - - - - - - - - -
Loans held for trading - - - - - - - - -
Loans at cost (e) 20,859 19,774 3.46% 36,012 34,074 78.18% 56,871 53,847 8.75%
Macro-hedge and other derivatives - - - (0) (0) 0.00% (0) (0) 0.00%
Loans 20,859 19,774 3.46% 36,012 34,074 78.18% 56,871 53,847 8.75%
Total Financial instruments 482,834 481,413 84.19% 43,879 41,941 96.23% 526,713 523,355 85.04%
Assets backing contracts where the financial risk is borne
by policyholders 68,961 68,961 12.06% - - - 68,961 68,961 11.21%
INVESTMENTS 582,259 571,804 100.00% 45,613 43,585 100.00% 627,872 615,389 100.00%
Investments (excluding those backing contracts where
the financial risk is borne by policyholders) 513,298 502,843 87.94%
(a) Includes infrastructure investments.
(b) Assets measured at fair value under the fair value option.
(c) Includes assets measured at fair value notably under the fair value option.
(d) Eligible to the IAS 39 Loans and receivables measurement category.
(e) Mainly relates to mortgage loans and policy loans.
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December 31, 2018
Investments as per Consolidated Statement of Financial Position
Insurance Other activities Total
(in Euro million) Fair
value
Carrying
value
% (value
balance
sheet)
Fair
value
Carrying
value
% (value
balance
sheet)
Fair
value
Carrying
value
% (value
balance
sheet)
Investment in real estate properties at amortized cost
(a) 28,461 19,504 2.76% 1,581 1,495 3.58% 30,042 20,999 2.81%
Investment in real estate properties designated as at
fair value through profit or loss (b) 1,435 1,435 0.20% - - - 1,435 1,435 0.19%
Macro-hedge and other derivatives - - - - - - - - -
Investment in real estate properties 29,896 20,939 2.96% 1,581 1,495 3.58% 31,477 22,434 3.00%
Debt instruments held to maturity - - - - - - - - -
Debt instruments available for sale 394,649 394,649 55.86% 4,184 4,184 10.01% 398,833 398,833 53.30%
Debt instruments designated as at fair value through
profit or loss (c) 36,059 36,059 5.10% 183 183 0.44% 36,242 36,242 4.84%
Debt instruments held for trading 210 210 0.03% 343 343 0.82% 553 553 0.07%
Debt instruments (at cost) that are not quoted in an
active market (d) 9,346 9,193 1.30% 938 938 2.24% 10,284 10,131 1.35%
Debt instruments 440,264 440,111 62.30% 5,648 5,648 13.51% 445,912 445,759 59.57%
Equity instruments available for sale 15,131 15,131 2.14% 1,466 1,466 3.51% 16,597 16,597 2.22%
Equity instruments designated as at fair value through
profit or loss (b) 7,815 7,815 1.11% 562 562 1.34% 8,377 8,377 1.12%
Equity instruments held for trading 43 43 0.01% 19 19 0.05% 62 62 0.01%
Equity instruments 22,990 22,990 3.25% 2,047 2,047 4.90% 25,036 25,036 3.35%
Non consolidated investment funds available for sale 7,425 7,425 1.05% 98 98 0.23% 7,523 7,523 1.01%
Non consolidated investment funds designated as at
fair value through profit or loss (b) 5,361 5,361 0.76% 311 311 0.74% 5,672 5,672 0.76%
Non consolidated investment funds held for trading 250 250 0.04% 193 193 0.46% 443 443 0.06%
Non consolidated investment funds 13,036 13,036 1.85% 602 602 1.44% 13,639 13,639 1.82%
Other assets designated as at fair value through
profit or loss, held by consolidated investment
funds
14,864 14,864 2.10% 169 169 0.40% 15,033 15,033 2.01%
Macro-hedge and other derivatives 744 744 0.11% 59 59 0.14% 803 803 0.11%
Sub total Financial instruments (excluding Loans) 491,897 491,745 69.61% 8,526 8,526 20.39% 500,423 500,271 66.86%
Loans held to maturity - - - - - - - - -
Loans available for sale 0 0 0.00% - - - 0 0 0.00%
Loans designated as at fair value through profit or loss
(b) - - - - - - - - -
Loans held for trading - - - - - - - - -
Loans at cost (e) 34,087 33,592 4.76% 33,608 31,789 76.03% 67,696 65,381 8.74%
Macro-hedge and other derivatives - - - 0 0 0.00% 0 0 0.00%
Loans 34,087 33,593 4.76% 33,609 31,789 76.03% 67,696 65,381 8.74%
Total Financial instruments 525,985 525,338 74.36% 42,134 40,315 96.42% 568,119 565,652 75.60%
Assets backing contracts where the financial risk is
borne by policyholders 160,176 160,176 22.67% - - - 160,176 160,176 21.41%
INVESTMENTS 716,056 706,452 100.00% 43,715 41,809 100.00% 759,772 748,261 100.00%
Investments (excluding those backing contracts
where the financial risk is borne by policyholders) 555,881 546,276 77.33%
(a) Includes infrastructure investments.
(b) Assets measured at fair value under the fair value option.
(c) Includes assets measured at fair value notably under the fair value option. (d) Eligible to the IAS 39 Loans and Receivables measurement category.
(e) Mainly relates to mortgage loans and policy loans.
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5.2 Investment in real estate properties
Investment in real estate properties includes buildings owned directly and through real estate entities.
Breakdown of the carrying value and fair value of investments in real estate properties at amortized cost,
including the impact of all derivatives:
June 30, 2019 December 31, 2018
(in Euro million)
Gross
value Amortization Impairment
Carrying
value
Fair
value
Gross
value Amortization impairment
Carrying
value
Fair
value
Investment in real estate properties
at amortized cost
Insurance (a) 22,100 (1,518) (657) 19,925 28,959 21,918 (1,624) (752) 19,542 28,499
Other activities 1,644 - (0) 1,644 1,734 1,495 - (0) 1,495 1,581
All activities excluding derivatives 23,744 (1,518) (657) 21,569 30,693 23,413 (1,624) (752) 21,037 30,080
Impact of Derivatives 25 25 (38) (38)
Total for all activities including
derivatives 21,594 30,718 20,999 30,042
(a) Includes infrastructure Investments.
Change in impairment and amortization of investment in real estate properties at amortized cost (all activities):
Impairment - Investment in real estate
properties Amortization - Investment in real estate
properties
(in Euro million) June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018
Opening value 752 568 1,624 2,114
Increase for the period 13 305 168 170
Write back following sale or repayment (62) (74) (169) (22)
Write back following recovery in value (29) (47) - -
Others (a) (17) (0) (106) (638)
Closing value 657 752 1,518 1,624
(a) Includes change in scope, reclassification to held for sale and the effect of changes in exchange rates.
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5.3 Unrealized gains and losses on financial investments
Including the effect of derivatives, unrealized capital gains and losses on financial investments, when not already
reflected in the income statement, were allocated as follows:
(in Euro million) June 30, 2019 December 31, 2018
INSURANCE Amortized
cost (a) Fair
value
Carrying
value
(b)
Unrealized gains
Unrealized losses
Amortized cost (a)
Fair value
Carrying
value
(b)
Unrealized gains
Unrealized losses
Debt instruments available for sale 320,487 374,335 374,335 57,969 4,121 360,667 394,649 394,649 41,324 7,342
Debt instruments (at cost) that are
not quoted in an active market 9,975 10,326 9,992 400 48 9,192 9,346 9,193 224 71
Equity instruments available for sale 13,350 17,087 17,087 3,906 168 13,341 15,131 15,131 2,275 485
Non consolidated investment funds
available for sale 6,972 7,804 7,804 889 57 6,774 7,425 7,425 741 90
(a) Net of impairment - including premiums/discounts and related accumulated amortization.
(b) Net of impairment.
(in Euro million) June 30, 2019 December 31, 2018
OTHER ACTIVITIES Amortized
cost (a) Fair
value
Carrying
value
(b)
Unrealized gains
Unrealized losses
Amortized cost (a)
Fair value
Carrying
value
(b)
Unrealized gains
Unrealized losses
Debt instruments available for sale 4,327 4,317 4,317 137 147 4,228 4,184 4,184 93 137
Debt instruments (at cost) that are not
quoted in an active market 1,188 1,187 1,188 - 0 938 938 938 - 0
Equity instruments available for sale 1,202 1,655 1,655 459 7 1,030 1,466 1,466 451 15
Non consolidated investment funds
available for sale 102 106 106 4 - 96 98 98 2 -
(a) Net of impairment - including premiums/discounts and related accumulated amortization.
(b) Net of impairment.
(in Euro million) June 30, 2019 December 31, 2018
TOTAL Amortized
cost (a)
Fair
value
Carrying
value
(b)
Unrealized
gains
Unrealized
losses
Amortized
cost (a)
Fair
value
Carrying
value
(b)
Unrealized
gains
Unrealized
losses
Debt instruments available for sale 324,814 378,652 378,652 58,106 4,268 364,895 398,833 398,833 41,417 7,479
Debt instruments (at cost) that are
not quoted in an active market 11,162 11,514 11,179 400 48 10,131 10,284 10,131 224 71
Equity instruments available for sale 14,552 18,742 18,742 4,365 175 14,371 16,597 16,597 2,726 500
Non consolidated investment funds available for sale
7,074 7,910 7,910 893 57 6,870 7,523 7,523 744 90
(a) Net of impairment - including premiums/discounts and related accumulated amortization.
(b) Net of impairment.
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5.4 Financial investments subject to impairment
5.4.1 BREAKDOWN OF FINANCIAL INVESTMENTS SUBJECT TO IMPAIRMENT
Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or
economic hedges).
June 30, 2019 December 31, 2018
(in Euro million)
Cost before
impairment
and
revaluation
to fair
value(a)
Impairment
Cost after
impairment
but before
revaluation
to fair value
(b)
Revaluation to fair value
(c)
Carrying
value
Cost before
impairment
and
revaluation
to fair value
(a)
Impairment
Cost after
impairment
but before
revaluation
to fair value
(b)
Revaluation to fair value
(c)
Carrying
value
Debt instruments
available for sale 324,836 (22) 324,814 53,838 378,652 364,973 (78) 364,895 33,938 398,833
Debt instruments (at cost) that are not
quoted in an active
market (c)
11,163 (1) 11,162 17 11,179 10,131 (0) 10,131 1 10,131
Debt instruments 335,999 (23) 335,976 53,855 389,831 375,104 (78) 375,025 33,939 408,964
Equity instruments
available for sale 16,900 (2,348) 14,552 4,190 18,742 17,104 (2,733) 14,371 2,226 16,597
Non consolidated investment funds
available for sale
7,926 (851) 7,074 836 7,910 7,785 (915) 6,870 654 7,523
Loans available for sale 0 - 0 - 0 0 - 0 - 0
Loans at cost (d) 54,995 (196) 54,799 (952) 53,847 65,999 (199) 65,800 (419) 65,381
Loans 54,995 (196) 54,799 (952) 53,847 65,999 (199) 65,800 (419) 65,381
TOTAL 415,819 (3,418) 412,401 57,930 470,331 465,991 (3,925) 462,066 36,400 498,466
(a) Asset value including impact of discounts/premiums and accrued interests, but before impairment and revaluation to fair value of assets available for sale.
(b) Asset value including impairment, discounts/premiums and accrued interests, but before revaluation to fair value of assets available for sale.
(c) Revaluation to fair value for instruments at cost related to the application of hedge accounting. (d) Including policy loans.
5.4.2 CHANGE IN IMPAIRMENT ON FINANCIAL INVESTMENTS
(in Euro million)
January 1, 2019
Increase for the period
Write back
following sale or
repayment
Write back
following recovery in
value
Other (a) June 30,
2019
Impairment - Debt instruments 78 3 (34) - (24) 23
Impairment - Equity instruments 2,733 65 (453) - 3 2,348
Impairment - Non consolidated investment funds 915 40 (221) - 117 851
Impairment - Loans 199 17 (7) (19) 5 196
TOTAL 3,925 125 (714) (19) 101 3,418
(a) Mainly relates to changes in the scope of consolidation and the impact of changes in exchange rates.
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(in Euro million)
January 1,
2018
Increase for
the period
Write back
following
sale or
repayment
Write back
following
recovery in
value
Other (a) December 31,
2018
Impairment - Debt instruments 243 53 (220) (0) 2 78
Impairment - Equity instruments 2,280 764 (295) - (16) 2,733
Impairment - Non consolidated investment funds 1,084 186 (41) - (314) 915
Impairment - Loans 228 49 (3) (60) (16) 199
TOTAL 3,837 1,052 (560) (60) (344) 3,925
(a) Mainly relates to changes in the scope of consolidation and the impact of changes in exchange rates.
5.5 Investments/Fair value
Fair values determined in whole directly by reference to an active market relate to prices which are readily and
regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and
those prices represent actual and regularly occurring market transactions on an arm’s length basis, i.e. the market
is still active. Such assets are categorized in the level 1 of the IFRS 13 fair value hierarchy.
Level 2 and 3 assets are investments which are not quoted in an active market or for which there is no active
market. Fair values for level 2 and 3 assets include:
values provided by external parties which
o are readily available including last transaction prices but relate to assets for which the market
is not always active,
o values provided at the request of the Group by pricing services and which are not readily publicly
available;
assets measured on the basis of valuation techniques including a varying degree of assumptions
supported by market transactions and observable data.
The common characteristic of level 2 and 3 assets is that their related market is considered as inactive. Their value
is generally based on a mark to market basis, except when there is no market or when the market is distressed, in
which case a mark to model approach is used. Assets not quoted in an active market which are marked to market
using mainly observable inputs are classified in level 2. Assets not quoted in an active market for which fair value
determination is not mainly based on observable inputs are classified as level 3. For all assets not quoted in an
active market/ no active market and for which a mark to model approach is used, the classification between level
2 and level 3 depends on the proportion of assumptions used supported by market transactions and observable
data (market observable inputs):
assumed to be used by pricing services; or
used by the Group in the limited cases of application of mark to model valuations.
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5.5.1 INVESTMENTS RECOGNIZED AT FAIR VALUE
The breakdown by valuation method of investments recognized at fair value including derivatives but excluding
assets backing contracts where the financial risk is borne by policyholders is as follows:
June 30, 2019 December 31, 2018
Assets
quoted in an active
market excluding
derivatives
Assets not quoted in an active
market or no active market
excluding derivatives
Assets
quoted in an active
market excluding
derivatives
Assets not quoted in an active
market or no active market
excluding derivatives
(in Euro million)
Fair value determined
directly by reference to
active
market excluding
derivatives
(level 1)
Fair value
mainly
based on observable
market data
excluding derivatives
(level 2)
Fair value
mainly not
based on observable
market data
excluding derivatives
(level 3)
Total
excluding
derivatives
Total
including
derivatives
Fair value determined
directly by reference to
active
market excluding
derivatives
(level 1)
Fair value
mainly
based on observable
market data
excluding derivatives
(level 2)
Fair value
mainly not
based on observable
market data
excluding derivatives
(level 3)
Total
excluding
derivatives
Total
including
derivatives
Debt instruments 293,924 86,939 267 381,130 378,652 315,367 84,894 877 401,138 398,833
Equity instruments 14,076 2,182 2,545 18,802 18,742 12,168 1,843 2,624 16,635 16,597
Non consolidated investment funds 818 5,581 1,495 7,894 7,910 1,272 4,781 1,464 7,517 7,523
Loans - - 0 0 0 (28) 0 28 0 0
Financial investments and loans available for sale
308,818 94,702 4,306 407,826 405,304 328,779 91,518 4,992 425,290 422,954
Investment in real estate properties - 1,479 - 1,479 1,479 - 1,435 - 1,435 1,435
Debt instruments 11,875 7,901 1,913 21,689 21,906 26,681 8,262 1,126 36,069 36,242
Equity instruments 3,010 330 5,639 8,980 8,980 2,790 700 4,885 8,375 8,377
Non consolidated investment funds 221 3,434 2,301 5,956 5,998 409 3,216 2,031 5,656 5,672
Other assets held by consolidated investment funds designated as at
fair value through profit or loss
3,722 5,972 6,893 16,587 16,608 1,135 6,765 7,125 15,025 15,033
Loans - - - - - - - - - -
Financial investments and loans designated as at fair value
through profit or loss
18,827 19,117 16,746 54,691 54,972 31,014 20,378 15,167 66,560 66,759
Debt instruments 101 155 0 257 121 512 181 0 694 553
Equity instruments - - 3 3 3 43 - 19 62 62
Non consolidated investment funds 0 29 - 30 30 197 245 0 443 443
Loans - - - - - - - - - -
Financial investments and loans
held for trading 102 185 3 290 154 753 427 19 1,198 1,059
TOTAL FINANCIAL INVESTMENTS
AND LOANS ACCOUNTED FOR AT FAIR VALUE
327,746 114,004 21,056 462,807 460,430 360,546 112,323 20,179 493,048 490,771
Note: This table excludes assets backing contracts where the financial risk is borne by policyholders with guaranteed minimum features.
Since the 2008 financial crisis, a significant volatility related to corporate spreads has been observed leading to
transfers between level 1 and 2 with both yield and bid ask spreads widening and narrowing from one closing to
another. Since 2010, this volatility has also been experienced on European government bonds with yields and bid
ask spreads widening significantly leading to transfers from level 1 to level 2 and then also subsequent sustained
improved market liquidity for certain government issuers resulting in transfers back to level 1 from level 2.
During the period ended on June 30, 2019, the net transfer between Level 1 and Level 2 was €-387 million. This
amount comprised €7,912 million transferred investments from Level 2 to Level 1, and €8,299 million transferred
from Level 1 to Level 2. These reclassifications were mainly related to changes in liquidity indicators observed in
the market for corporate bonds throughout the period.
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TRANSFER IN AND OUT OF THE LEVEL 3 CATEGORY AND OTHER MOVEMENTS
From January 1, 2019 to June 30, 2019, the amount of level 3 assets increased by €0.8 billion to €21.0 billion,
representing 4.5% of the total assets at fair value (4.1% as of December 31, 2018 or €20.1 billion).
Main movements relating to level 3 assets to be noted were the following:
€+1.7 billion of new investments;
€+0.9 billion of net asset transfers in and out of level 3 and foreign exchange fluctuation impact;
€+0.7 billion of net asset transfers in and out of level 3 mainly related to Group Life portfolio in
Switzerland classified as held for sale;
€+0.3 billion of change in unrealized gains and losses;
€-1.5 billion due to change in consolidation scope for AXA Equitable Holdings, Inc.;
€-1.3 billion of asset sales, redemptions and settlements mainly debt instruments, equity securities and
non-consolidated investment funds accounted as available for sale and equity securities, non-
consolidated investment funds, other assets held by controlled investment funds and debt instruments
accounted as fair value through P&L.
5.5.2 INVESTMENTS RECOGNIZED AT AMORTIZED COST
June 30, 2019 December 31, 2018
Assets
quoted in an
active market
Assets not quoted in an active
market or no active market
Assets
quoted in an
active market
Assets not quoted in an active
market or no active market
(in Euro million)
Fair value
determined directly by
reference to
active market
(level 1)
Fair value mainly
based on
observable market data
(level 2)
Fair value mainly not
based on
observable market data
(level 3)
Total
excluding
derivatives
Total
including
derivatives
Fair value
determined directly by
reference to
active market
(level 1)
Fair value mainly
based on
observable market data
(level 2)
Fair value mainly not
based on
observable market data
(level 3)
Total
excluding
derivatives
Total
including
derivatives
Debt instruments held to maturity - - - - - - - - - -
Loans held to maturity - - - - - - - - - -
Financial investments and loans
held to maturity - - - - - - - - - -
Investment in real estate properties
at amortized cost (0) 30,463 230 30,693 30,718 - 29,660 420 30,080 30,042
Debt instruments at cost (loans &
receivables) 308 5,314 5,875 11,497 11,514 221 7,340 2,722 10,283 10,284
Loans at amortized cost 38 19,329 38,483 57,849 56,871 48 31,214 36,880 68,143 67,696
Non consolidated investment at cost
- - - - - - - - - -
Financial investments and loans
at amortized cost 346 55,105 44,588 100,039 99,103 269 68,214 40,022 108,506 108,021
TOTAL FAIR VALUE OF INVESTED ASSETS AT AMORTIZED COST
346 55,105 44,588 100,039 99,103 269 68,214 40,022 108,506 108,021
Note: This table excludes assets backing contracts where the financial risk is borne by policyholders with guaranteed minimum features.
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NOTE 6 SHAREHOLDERS’ EQUITY AND MINORITY INTERESTS
The consolidated statement of changes in equity is presented as a primary Financial Statement.
6.1 Impact of transactions with shareholders
6.1.1 CHANGE IN SHAREHOLDERS’ EQUITY GROUP SHARE FOR THE FIRST HALF OF 2019
SHARE CAPITAL AND CAPITAL IN EXCESS OF NOMINAL VALUE
During the first half of 2019, the following transactions had an impact on AXA’s share capital and capital in excess
of nominal value:
capital decrease of €274 million corresponding to 11.4 million shares in order to eliminate the dilutive
effect of share-based compensation schemes (AXA SA’s stock options, performance shares plans and
share plan);
capital increase of €22 million due to the exercise of stock options for 1.5 million shares;
shared based payments for €17 million.
TREASURY SHARES
As of June 30, 2019, the Company and its subsidiaries owned 29.8 million AXA shares, representing 1.2% of the
share capital, a decrease of 11.8 million shares compared to December 31, 2018.
As of June 30, 2019, the carrying value of treasury shares and related derivatives was €685 million and there were
no AXA shares held by consolidated mutual funds not backing contracts where financial risk is borne by
policyholders.
As of June 30, 2019, 1.6 million treasury shares backing contracts where the financial risk is borne by policyholders
held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical
cost was €30 million and their market value €38 million at the end of June 2019.
UNDATED SUBORDINATED DEBT AND RELATED FINANCIAL EXPENSES
As described in the accounting principles, undated subordinated debt instruments issued by the Group do not
qualify as liabilities under IFRS.
Undated subordinated debt instruments are classified in shareholders’ equity at their historical value and their
closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the
translation reserve.
During the first half of 2019, the following transactions pertaining to undated subordinated debt had an impact
on AXA’s other reserves:
€+13 change in other from to foreign exchange rate fluctuations;
€-98 million from interest expenses related to the undated subordinated debt (net of tax).
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As of June 30, 2019 and December 31, 2018, undated subordinated debts recognized in shareholders’ equity were
as follows:
June 30, 2019 December 31, 2018
(in million)
Value of the undated
subordinated debt in
currency of issuance
Value of the undated
subordinated debt in
Euro million
Value of the undated
subordinated debt in
currency of issuance
Value of the undated
subordinated debt in
Euro million
October 29, 2004 - 375 M€ - rate 6.0% 375 375 375 375
December 22, 2004 - 250 M€ - rate 6.0% 250 250 250 250
January 25, 2005 - 250 M€ - rate 6.0% 250 250 250 250
July 6, 2006 - 350 M£ - rate 6.7% 350 390 350 391
December 14, 2006 - 750 MUS$ - rate 6.4% 750 656 750 652
October 16, 2007 - 700 M£ - rate 6.8% (a) 219 242 219 243
November 7, 2014 - 984 M€ - rate 3.941% (a) 984 981 984 981
November 7, 2014 - 724 M£ - rate 5.453% (a) 724 805 724 806
May 20, 2014 - 1,000 M€ - rate 3.9% 1,000 997 1,000 997
January 22, 2013 - 850 MUS$ - rate 5.5% 850 741 850 737
Undated notes - 625 M€ at variables rates 625 625 625 625
Undated notes - 27,000 MJPY - rate 3.3% 27,000 220 27,000 215
Undated notes - 375 MUS$ at variables rates 375 330 375 328
TOTAL 6,862 6,849
(a) These undated Deeply Subordinated notes were part of the liability management exercise launched on October 29, 2014.
Undated subordinated debt often contains the following features:
early redemption clauses (calls) at the Group’s option, giving AXA the ability to redeem on certain dates
the principal amount before settlement and without penalty; and
interest rate step-up clauses with effect from a given date.
DIVIDENDS PAID
At the shareholders’ meeting held on May 6, 2019, shareholders approved a dividend distribution of €1.34 per
share corresponding to €3,189 million with respect to the 2018 financial year.
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6.1.2 CHANGE IN SHAREHOLDERS’ EQUITY GROUP SHARE FOR THE FIRST HALF OF 2018
SHARE CAPITAL AND CAPITAL IN EXCESS OF NOMINAL VALUE
During the first half of 2018, the following transactions had an impact on AXA’s share capital and capital in excess
of nominal value:
capital decrease of €-71 million (or 2.9 million shares) in order to eliminate the dilutive effect of share-
based compensation schemes (AXA SA’s stock options and performance shares plans);
capital increase of €+17 million due to exercise of stock options for 1 million shares;
shared based compensation payments for €+16 million.
TREASURY SHARES
As of June 30, 2018, the Company and its subsidiaries owned approximately 41.1 million AXA shares, representing
1.7% of the share capital, a decrease of 0.7 million shares compared to December 31, 2017.
As of June 30, 2018, the carrying value of treasury shares and related derivatives was €1,031 million and there
were no AXA shares held by consolidated mutual funds not backing contracts where financial risk is borne by
policyholders.
As of June 30, 2018, 1.9 million treasury shares backing contracts where the financial risk is borne by policyholders
held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical
cost was €17 million and their market value €39 million at the end of June 2019.
UNDATED SUBORDINATED DEBT AND RELATED FINANCIAL EXPENSES
As described in the accounting principles, undated subordinated debt instruments issued by the Group do not
qualify as liabilities under IFRS.
Undated subordinated debt instruments are classified in shareholders’ equity at their historical value and their
closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the
translation reserve.
During the first half of 2018, the following transactions pertaining to undated subordinated debt had an impact
on AXA’s other reserves:
change in other was due to foreign exchange rate fluctuations for €+76 million;
change in undistributed profits and other reserves was due to interest expenses related to the undated
subordinated debt (net of tax) for €-110 million.
OTHERS
The €-2,450 million decrease in others mainly comes from the US IPO.
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DIVIDENDS PAID
At the shareholders’ meeting held on May 7, 2018, shareholders approved a dividend distribution of €1.26 per
share corresponding to €2,998 million with respect to the 2017 financial year.
6.2 Comprehensive income for the period
The Statement of Comprehensive Income, presented as a primary financial statement, includes net income for
the period, the reserve relating to the change in fair value of available for sale financial instruments, the
translation reserve, and actuarial gains and losses on employee benefit obligations.
6.2.1 COMPREHENSIVE INCOME FOR THE FIRST HALF OF 2019
RESERVE RELATED TO CHANGES IN FAIR VALUE OF AVAILABLE FOR SALE FINANCIAL INSTRUMENTS INCLUDED IN
SHAREHOLDERS’ EQUITY
The increase in gross unrealized gains and losses on assets available for sale totaled €+21,876 million, of which a
€+19,471 million increase in unrealized capital gains on debt securities driven by the decrease on interest rates.
The following table shows the reconciliation between gross unrealized gains and losses on available for sale
financial assets and the corresponding reserve recognized in shareholders’ equity:
(in Euro million)
June 30,
2019
December 31,
2018
Gross unrealized gains and losses (a) 60,451 38,575
Less unrealized gains and losses attributable to:
Shadow accounting on policyholder participation and other obligations (35,677) (22,154)
Shadow accounting on Deferred Acquisition Costs (b) (907) (210)
Shadow accounting on Value of purchased Business In force (171) (159)
Unallocated unrealized gains and losses before tax 23,696 16,052
Deferred tax (5,893) (4,189)
Unrealized gains and losses net of tax - assets available for sale 17,803 11,863
Unrealized gains and losses net of tax (100%) - equity accounted companies 392 (32)
UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 18,196 11,831
Minority interests' share in unrealized gains and losses (c) (243) (42)
Translation reserves (d) (246) (223)
UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (e) 17,707 11,566
(a) Unrealized gains and losses on total available for sale invested assets including loans and assets held for sale.
(b) Net of shadow accounting on unearned revenues and fees reserves and held for sale activities.
(c) Including foreign exchange impact attributable to minority interests. (d) Group share.
(e) Including unrealized gains and losses on assets held for sale.
As of June 30, 2019, most of the unrealized gains on assets available for sale related to Life & Savings entities.
In jurisdictions where participating business represents an important portion of contracts in force and where
required minimum local policyholders’ share in the entities’ results (limited to investment or not) are significant,
the reconciliation between gross unrealized gains and losses on available for sale financial assets and the
corresponding net reserve recognized in shareholders’ equity were as follows as of June 30, 2019:
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June 30, 2019
(in Euro million) France
Life & Savings Germany
Life & Savings Switzerland
Life & Savings Belgium
Life & Savings
Gross unrealized gains and losses (a) 21,501 10,514 3,741 6,443
Less unrealized gains and losses attributable to:
Shadow accounting on policyholders' participation and other obligations (16,307) (8,961) (3,028) (3,972)
Shadow accounting on Deferred Acquisition Costs (b) (319) - (106) (80)
Shadow accounting on Value of purchased Business In force - - (100) (2)
Unallocated unrealized gains and losses before tax 4,875 1,553 508 2,389
Deferred tax (1,247) (471) (99) (570)
Unrealized gains and losses (net of tax) - assets available for sale 3,629 1,082 409 1,819
Unrealized gains and losses net of tax - equity accounted companies 35 (10) - -
UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 3,664 1,072 409 1,819
Minority interests' share in unrealized gains and losses (c) (9) 0 - (1)
Translation reserves (d) 0 - (186) (0)
UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (e) 3,655 1,072 223 1,819
(a) Unrealized gains and losses on total available for sale invested assets including loans and assets held for sale.
(b) Net of shadow accounting on unearned revenues and fees reserves.
(c) Including foreign exchange impact attributable to minority interests. (d) Group share.
(e) Including unrealized gains and losses on assets held for sale.
The change in reserves related to changes in fair value of available for sale financial instruments included in
shareholders’ equity relating to changes in fair value of assets in June 30, 2019 and December 31, 2018 broken
down as follows:
CURRENCY TRANSLATION RESERVE
The total impact of currency translation reserve for the first half year of 2019 amounted to (€-528 million). This
was mainly driven by the deconsolidation of AXA Equitable Holdings, Inc. (€-925 million) partly offset by AXA SA
(€+229 million), Japan (€+171 million) and Switzerland (€+154 million).
(in Euro million)
June 30,
2019
December
31, 2018
Unrealized gains and losses (net of tax) 100%, opening 11,831 16,194
Transfer in the income statement on the period (a) (28) (874)
Investments bought in the current accounting period and changes in fair value 6,424
(3,715)
Foreign exchange impact 174 289
Change in scope and other changes (205) (62)
Unrealized gains and losses (net of tax) 100%, closing 18,196 11,831
Minority interests' share in unrealized gains and losses (b) (243) (42)
Translation reserves (c) (246) (223)
UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (d) 17,707 11,566
(a) Transfer induced by disposal of financial assets, impairment write-back following reevaluation, or transfer of expenses following impairment charge during the period, and debt
instruments discount premium impacts.
(b) Including foreign exchange impact attributable to minority interests.
(c) Group share.
(d) Including unrealized gains and losses on assets held for sale operations.
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EMPLOYEE BENEFIT ACTUARIAL GAINS AND LOSSES
The total impact of employee benefit actuarial losses for the first half year of 2019 amounted to (€-398 million)
net shareholders’ equity Group share. This was mainly driven by losses on Germany (€-269 million), Switzerland
(€-53 million), Belgium (€-39 million) and France (€-36 million) due to the discount rate decrease in the Eurozone
and Switzerland partly offset by the gains registered on United Kingdom & Ireland (€+67 million) related to the
increase in discount rates and inflation rates.
6.2.2 COMPREHENSIVE INCOME FOR THE FIRST HALF OF 2018
RESERVE RELATED TO CHANGES IN FAIR VALUE OF AVAILABLE FOR SALE FINANCIAL INSTRUMENTS INCLUDED IN
SHAREHOLDERS’ EQUITY
The decrease in gross unrealized gains and losses on assets available for sale totaled (€-6,787 million), of which a
€-5,404 million decrease in unrealized capital gains on debt securities which was mainly driven by interest rates
increases, and a decrease of both equity securities €-744 million and in non consolidated investment funds €-477
million, in Life with the financial market evolution.
CURRENCY TRANSLATION RESERVE
The Group share translation reserve movement (€+909 million) was mainly driven by the United States (€+414
million), Japan (€+313 million), Switzerland (€+98 million), Asia (€+89 million) and the United Kingdom (€+16
million), partly offset by the negative evolution in International (€-51 million).
EMPLOYEE BENEFIT ACTUARIAL GAINS AND LOSSES
The total impact of employee benefit actuarial gains for the first half year 2018 amounted to (€+641 million) net
shareholders’ equity Group share. This was mainly driven by the United States with gains due to the recycling of
(€+243 million) in minority interests and the increase in discount rate assumptions used at HY18 (€+64 million). In
the UK & Ireland, the increase in discount rates and inflation rates were partially offset by some losses on plan
assets resulting in an amount of (€+217 million) global actuarial gains. The (€+121 million) actuarial gains in
Switzerland were due to the over performance of plan assets and an increase in discount rate assumptions used.
6.3 Change in minority interests
Under IFRS, minority interests in most investment funds in which the Group invests consist of instruments that
holders can redeem at will at fair value, and qualify as a liability rather than a shareholders’ equity item.
6.3.1 CHANGE IN MINORITY INTERESTS FOR THE FIRST HALF OF 2019
The €-5,286 million decrease in minority interests to €+5,538 million was mainly driven by the comprehensive
income and transactions with minority interest holders:
The comprehensive income for the period included the following:
o Net income attributable to minority interests for €+239 million;
o Reserves relating to changes in fair value through shareholders’ equity for €+213 million;
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o Foreign exchange movements for €+181 million;
o Employee benefits actuarial gains and losses €-4 million.
Transactions with minority interests’ holders, mainly included:
o Decrease in minority interests as a consequence of the deconsolidation of AXA Equitable
Holdings, Inc. for €-5,172 million;
o Reclassification of the equity component of the Mandatory Exchangeable Bonds to financing
debt for €-614 million;
o Minority interests qualified as equity resulting from the increase in the value of minority interests
holdings due to a capital increase in existing consolidated investment funds for €+53 million;
o Dividend payout to minority interests’ holders for €-202 million.
6.3.2 CHANGE IN MINORITY INTERESTS FOR THE FIRST HALF OF 2018
The €+5,409 million increase in minority interests to €+11,065 million was mainly driven by the comprehensive
income and transactions with minority interest holders:
The comprehensive income for the period notably included the following:
o Net income attributable to minority interests for €+213 million;
o Foreign exchange movements for €+40 million;
o Employee benefits actuarial gains and losses €-237 million;
o Reserves relating to changes in fair value through shareholders’ equity for €-142 million.
Transactions with minority interests’ holders, mainly included:
o Increase in minority interests following the IPO €4,716 million;
o Equity component of the Mandatory Exchangeable Bonds €+587 million;
o Minority interests qualified as equity resulting from an increase in the value of minority interest
holdings due to a capital increase in existing consolidated investment funds for €+168 million;
o Dividend payout to minority interests’ holders for €-258 million.
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NOTE 7 FINANCING DEBT
Carrying value
(in Euro million) June 30,
2019
December 31,
2018
AXA 9,854 9,358
Subordinated notes, 5.25% due 2040 (€) 1,300 1,300
Subordinated notes, 5.125% due 2043 (€) 1,000 1,000
U.S. registered redeemable subordinated debt, 8.60% 2030 (US$) 1,159 1,064
U.S. registered redeemable subordinated debt, 7.125% 2020 (£) 363 363
Subordinated debt, 5.625% due 2054 (£) 837 838
Derivatives relating to subordinated debts (a) 70 (324)
Subordinated debt, 3.375%, due 2047(€) 1,500 1,500
Undated Subordinated notes, US$ 850M, 4.5% 747 742
Subordinated notes, 5.125%, due 2047 (US$) 879 873
Subordinated notes, 3.25%, due 2049 (€) 2,000 2,000
AXA XL 1,388 1,385
Subordinated Notes, 4.45%, due March 2025 (US$) 438 437
Subordinated Notes, 5.5%, due March 2045 (US$) 449 448
Subordinated Notes, 3.25%, due March 2025 (€) 500 501
AXA Bank Belgium 21 26
Subordinated debt maturity below 10 years fixed rate 7 11
Undated Subordinated debt fixed rate 13 16
AXA Italy 67 67
Subordinated notes, EURIBOR 6 months + 81bps 67 67
Other subordinated debt (under €100 million) 39 39
Subordinated debt 11,368 10,876
AXA 1,258 622
Mandatory exchangeable bonds into shares of AXA Equitable Holdings, Inc. (b) 758 122
Euro Medium Term Note, due 2028 500 500
AXA XL 285 607
Senior Notes, 6.25%, due May 2027 (US$) - 322
Senior Notes, 5.25%, due December 2043 (US$) 285 285
AXA Financial - 3,594
Senior notes, 7%, due 2028 - 305
Senior notes, 3.9 %, due 2023 - 694
Senior notes, 4.35%, due 2028 - 1,300
Senior notes, 5%, due 2048 - 1,295
AXA UK Holdings - 168
GRE: Loan Notes, 6.625%, due 2023 - 168
Other financing debt instruments issued (under €100 million) 104 104
Other financing debt instruments issued (under €100 million) 104 104
Derivatives relating to other financing debt instruments issued (a) - (1)
Financing debt instruments issued 1,647 5,096
TOTAL FINANCING DEBT (c) 13,015 15,971
(a) Hedging instruments in accordance with IAS 39 and economic hedge derivatives not eligible for hedge accounting.
(b) Only the debt component as of December 31, 2018.
(c) Excluding accrued interest on derivatives.
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NOTE 8 NET INCOME PER ORDINARY SHARE
The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share:
the calculation of the basic net income per ordinary share assumes no dilution and is based on the
weighted average number of outstanding ordinary shares during the period;
the calculation of diluted net income per ordinary share takes into account shares that may be issued as
a result of stock option plans. The effect of stock option plans on the number of fully diluted shares is
taken into account only if options are considered to be exercisable on the basis of the average stock price
of the AXA share over the period.
(in Euro million) (a)
June 30, 2019
June 30, 2018
Net income Group share 2,333 2,796
Undated subordinated debt financial charge (d) (136) (115)
Net income including impact of undated subordinated debt A 2,197 2,681
Weighted average number of ordinary shares (net of treasury shares) - opening 2,383 2,383
Stock options exercised (b) 1 1
Treasury shares (b) 8 (1)
Capital increase/decrease (b) (11) -
Weighted average number of ordinary shares B 2,381 2,383
BASIC NET INCOME PER ORDINARY SHARE C = A / B 0.92 1.13
Potentially dilutive instruments :
Stock options 2 4
Other 1 1
Fully diluted - weighted average number of shares (c) D 2,384 2,388
NET INCOME INCLUDING IMPACT OF UNDATED SUBORDINATED DEBT 2,197 2,681
FULLY DILUTED NET INCOME PER ORDINARY SHARE E = A / D 0.92 1.12
(a) Except for number of shares (million of units) and earnings per share (Euro).
(b) Weighted average.
(c) Taking into account the impact of potentially dilutive instruments.
(d) As of June 30, 2019, it includes financial charges of €9 million related to Mandatory Exchangeable Bonds for only the first three months of 2019 and €29 million related to preferred shares.
As of June 30, 2019, net income per ordinary share stood at €0.92 on a basic calculation and on a fully diluted
basis.
As of June 30, 2018, net income per ordinary share stood at €1.13 on a basic calculation, and at €1.12 on a fully
diluted basis.
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NOTE 9 SUBSEQUENT EVENTS
AXA S.A. ANNOUNCED THE FULL EXERCISE OF THE OVER-ALLOTMENT OPTION RELATED TO THE RECENTLY
COMPLETED SECONDARY OFFERING OF AXA EQUITABLE HOLDINGS, INC.’S COMMON STOCK
On July 8, 2019, AXA announced that the underwriters in the secondary offering of shares of common stock (the “Offering”)
of AXA Equitable Holdings, Inc., completed on June 7, 2019, have fully exercised their option to purchase an additional
6,000,000 shares of EQH’s common stock from AXA, subject to the same terms and conditions as the Offering.
Net proceeds (1) to AXA from the exercise of the underwriters’ option amounts to USD 125 million or €112 million (2),
corresponding to a net price (1) of USD 20.85 per share. Following the sale of these additional shares, AXA’s ownership in
EQH has decreased from 40.1% (3)(4) to 38.9% (3)(4).
(1) Net of underwriting discounts and commissions. (2) 1 Euro = USD 1.1219 as of July 5, 2019 (Source: Bloomberg). (3) EQH’s issued and outstanding common stock as of May 9, 2019 comprised 491,138,042 shares. (4) Including the shares to be delivered on redemption of the bonds mandatorily exchangeable into EQH shares, issued by AXA in May 2018.
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III. Statutory auditors’ review
report on the 2019 Half Year
Financial Information /
STATUTORY AUDITORS’ REVIEW REPORT ON THE 2019 HALF YEAR FINANCIAL INFORMATION
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PricewaterhouseCoopers Audit Mazars 63, rue de Villiers 61, rue Henri Regnault 92208 Neuilly-sur-Seine Cedex 92075 Paris La Défense Cedex
Statutory Auditors’ Review Report on the 2019 half-year Financial Information
(Period from January 1st to June 30th) To the Shareholders AXA SA 25, Avenue Matignon 75008 PARIS In compliance with the assignment entrusted to us by your General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on:
- the review of the accompanying condensed half-year consolidated financial statements of AXA SA, for the period from January 1 to June 30, 2019;
- the verification of the information contained in the half-year management report. These condensed half-year consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review. 1. Conclusion on the financial statements We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - the standard of IFRS as adopted by the European Union applicable to interim financial information. Without qualifying our conclusion, we draw your attention to the matter set out in note 1.2 of the Appendix to the condensed half-yearly consolidated financial statements regarding the impacts of the first application of IFRS 16 "Leases" and IFRIC 23 "Uncertainty over income tax treatment”.
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2. Specific verification We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements, reminded that it is not our responsibility to conclude on the fair presentation and consistency with the half-year financial statements of the solvency related information.
Neuilly-sur-Seine and Courbevoie, August 1st, 2019
The Statutory Auditors
French original signed by*
PricewaterhouseCoopers Audit MAZARS Bénédicte Vignon Grégory Saugner Jean-Claude Pauly Maxime Simoen * This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
IV. Statement of the person
responsible for the Half Year
Financial Report /
STATEMENT OF THE PERSON RESPONSIBLE FOR THE HALF YEAR REPORT
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Statement of the person responsible for the Half-Year Financial Report
I certify, to the best of my knowledge, that the condensed financial statements for the past half-year have been
prepared in accordance with applicable accounting standards and give a fair view of the assets, liabilities and
financial position and profit or loss of the Company and all the undertakings included in the consolidation, and
that the interim management report, to be found in the first part of this Report, presents a fair review of the
important events that have occurred during the first six months of the financial year, their impact on the financial
statements, major related-party transactions, and describes the principal risks and uncertainties for the
remaining six months of the financial year.
Paris, August 1, 2019
Thomas Buberl
Chief Executive Officer