Year end 2014 results Presentation for investors and analysts 11 th February 2015
Contents 1 Key highlights 2 Consolidated financial information 3 Regional Areas and Business Units 4 Financial supplement 5 Appendix 6 Schedule and contacts 2
1 Key highlights Business growth and improvement in underwriting results, along with a favourable performance of the financial markets Revenues 26,366.7 1.8% Premiums 22,400.9 2.6% Managed savings 40,817.5 21.4% Non-life combined ratio 95.7% -0.4 p.p. ROE 10.0% -0.1 p.p. Solvency margin 2.59 x + 0.13 x Shareholders' equity per share 2.97 16.9% Attributable result 845.1 6.9% 6.9% Earnings per share (euros) 0.27 Million euros 3 Note: Earnings per share calculated using 3,079,553,273 shares
1 Key highlights Highlights of the results Business growth in most business lines and countries, with significant contribution of Life Assurance and S pain’s return to growth 40 bp decrease in the combined ratio, thanks to noteworthy improvements of the expense ratio in Brazil and in reinsurance Notable increase in net financial income, driven by the rise in the market value of the portfolio Equity grew by €1,576 million since year-end 2013, thanks to the result for the period, t he increase in value of the investment portfolio and the appreciation of the main currencies, especially the US dollar At constant exchange rates, premiums would have grown 7.7% and attributable results 11.8% 4
1 Key highlights A year in which we have continued to consolidate our leading position in Spain, while advancing in our international diversification process Market shares – Non-Life – Market shares – Spain - 2014 International Business – 2013 Market Market Line of Business Ranking Shares Country Ranking Shares MOTOR 1 20.6% Brazil 1 15.5% TOTAL NON-LIFE 1 15.2% Puerto Rico 1 14.5% TOTAL LIFE 2 10.6% Peru 3 15.4% Chile 4 10.8% Colombia 6 6.9% (1) 5 5.9% Turkey Mexico 5 5.2% (2) 19 0.8% United States Massachuset t s (2) 1 27.0% S ource: ICEA, Fundación MAPFRE, Insurance Associat ion of Turkey, Insurance S t at ut ory Market S hare Report (US A) 5 1) Data as at June 2014 2) Figures for MOTOR business
1 Key highlights In an environment of clear economic recovery in Spain… GDP – quarterly growth (% ) 0.7 0.5 0.5 0.5 0.3 0.3 0.3 0.2 0.1 0.1 0.0 0.0 -0.1 -0.1 -0.1 -0.3 -0.3 -0.3 -0.4 -0.5 -0.5 -0.6-0.6 -0.8 -0.8 -1.0 -1.0 -1.6 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 • S ix consecutive quarters of growth, driven primarily by the improvement in domestic demand • The main international organisations forecast growth of around 2% in 2015 6 S ource: INE, Bloomberg
1 Key highlights … MAPFRE’s business has returned to growth, outperforming the market Total Non-Life premiums in Spain Market excl. MAPFRE MAPFRE 2.6% 2.2% 2.1% 1.6% 0.7% -0.2% -0.3% -0.4% -0.9% -0.9% -1.6% -1.9% -2.0% -2.0% -2.3% -2.3% -2.7% -3.9% -4.6% -5.1% -5.9% -6.0% -7.8% -8.2% 1Q12 vs 2Q12 vs 3Q12 vs 4Q12 vs 1Q13 vs 2Q13 vs 3Q13 vs 4Q13 vs 1Q14 vs 2Q14 vs 3Q14 vs 4Q14 vs 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 7 S ource: ICEA, own calculat ions
1 Key highlights MAPFRE’s business model retains its leading position in terms of growth, profitability and costs � In 2014, MAPFRE recorded premium growth of 1.1% in S pain � Market share increased to 20.58% (+0.06 p.p.) � The average premium has decreased by 9.4% since 2007, compared to a 19.2% reduction for the sector Motor insurance Motor insurance � Combined ratio of 98.1% in 2014 � The sector excluding MAPFRE recorded an expense ratio of 20.6% , as at S eptember 2014, compared to MAPFRE’s 17.4% � Premium growth of 4.4% (vs. 2.8% decrease for the sector) � Technical reserves rose 11.7% (vs. 1.6% for the sector) Life Assurance Life Assurance � MAPFRE became BANKIA ’s exclusive bancassurance provider and fund and fund � S trong recovery in net contributions to pension funds (€126.9 million in 2014 management management compared to -€147.7 million in 2013) and to mutual funds (€218.5 million in 2014 compared to €105.2 million in 2013) 8 S ource: ICEA, own calculat ions
1 Key highlights Our key strategic objectives highlight our focus on profitable growth… Revenues Expense Ratio (% ) Combined Ratio (% ) 30,000 29.1 26,366 25,889 96.1 < 96.0 28.1 95.7 27.7 2013 2014 2016 Target 2013 2014 2016 Target 2013 2014 2016 Target Million euros 9
1 Key highlights … and our commitment to long-term value creation for shareholders � Maintain a dividend policy aligned with results growth Dividends Dividends � The dividend paid in 2014, which amounted to €431.1 million, increased 16.7% with respect to the previous year � Management focused on producing returns above the cost of capital and commensurate with the risks taken, in line with a strategy targeted at creating value Balance sheet Balance sheet � S olvency stood at levels of 259% � Equity increased by €1,576 million in 2014 � “ A” financial strength rating, the highest level of any S panish group (1) , and “ BBB+” issuer rating 10 1) Ratings assigned by S tandard & Poor’ s
1 Key highlights A 7.7% increase in dividends is proposed Interim dividend Final dividend � The Board of Directors has agreed � In October, the Board of Directors to propose to the AGM a final resolved to pay an interim dividend dividend against the 2014 results of 6 cents per share against the of 8 cents gross per share, thus 2014 results, thus raising the total taking the total dividend proposed dividend paid in the year to 14 against the 2014 results to 14 cents cents per share per share 11
1 Key highlights We have made progress in the development of our multichannel sales network through own branches, tied agents, brokers and bank branches… BRANCHES 2013 2014 BROKERS 2013 2014 TOTAL BROKERS 68,207 79,289 Iberia Territorial Area 6,458 7,010 Own and franchisee 3,185 3,149 Iberia Territorial Area 17,477 18,734 Bancassurance 3,273 3,861 International Territorial Area 8,064 8,336 Latam Territorial Area 42,666 52,219 International Territorial Area 275 288 Latam Territorial Area 7,589 7,710 Own and franchisee 2,086 2,087 Bancassurance 5,503 5,623 TOTAL BRANCHES 14,322 15,008 • S ustained growth of bancassurance businesses in S pain and Brazil • At the beginning of the year, MAPFRE became Bankia’s exclusive insurance provider • Diversification of the distribution channels in the US A (direct sale in supermarkets, opening of new MAPFRE branches) 12
1 Key highlights … with a special focus on new distribution channels • Acquisition of Direct Line’s businesses in Italy and Germany • Profitable and consolidated companies • Direct insurance market leader: #1 in Italy and #3 in Germany • Business with a high growth and value creation potential • Verti’s market-leading position in the sale of online insurance products in S pain • S tarted to operate in January 2011 and reported premium volumes of €20.8 million that year • In 2014, it reported premiums of €66.8 million, a y-o-y increase of 47% • Large potential for the development of the online business 13
1 Key highlights With a simplified and more efficient corporate governance model CHAIRMAN & CEO VICE CHAIRMAN EXECUTIVE VICE CHAIRMAN COMMITTEE FINANCE HUMAN RESOURCES GENERAL COUNSEL RESOURCES AND INVESTMENT INSTITUTIONAL COORDINATION INTERNAL AUDIT VICE CHAIRMAN BUSINESS SUPPORT STRATEGY AND BUSINESS AND CLIENTS DEVELOPMENT G BUSINESS UNIT BUSINESS UNITS – INSURANCE / ASSISTANCE / GLOBAL RISKS L O B C IBERIA LATAM INTERNATIONAL REINSURANCE A O L M M B I U T S BRAZIL LATAM LATAM NORTH EMEA APAC T SPAIN/PORTUGAL I NORTH SOUTH E AMERICA N E S S • Decentralised management within a common operational framework, which ensures the implementation of GROUP policies at a local level and allows the Company to further advance in the achievement of its obj ectives • Contributing to a greater diversification of the product portfolio • Efficient allocation of professional resources to ensure a thorough and rigorous analysis of business opportunities and the risks taken 14
Contents 1 Key highlights 2 Consolidated financial information 3 Regional Areas and Business Units 4 Financial supplement 5 Appendix 6 Schedule and contacts 15
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