Aegon Ltd. 2026 H1 Earnings Call

Please go ahead. Thank you, operator.

Welcome to this conference call on Aegon's first half year 2026 results. My name is Yves Cormier, Head of Investor Relations, and joining me today to take you through our performance and progress are Aegon CEO, Lard Friese, and CFO, Duncan Russell. Before we start, I would like to ask you to read our disclaimer on forward-looking statements, which you can find at the end of the presentation. With that, I would like to give the floor to Lars.

Thanks, Yves, and thank you all for joining today's call. I will start by running you through our strategic developments and commercial performance in the first half of 2026, before Duncan will go through our results in more detail. We delivered strong commercial growth and robust financial results in the first half of 2026. Our operating results increased to EUR 804 million, supported by strong commercial momentum and favorable financial markets. Operating capital generation increased year-over-year to EUR 416 million from business growth and improved claims experience. Transamerica delivered excellent growth in new life sales. World Financial Group continued to grow and perform, and written sales in the retirement plans remained strong. Asset Management had third-party flows positive. Third-party net flows in our international businesses contributed to growth as well, led by Brazil. Our capital position remains strong, and we have confidence in the outlook of our business.

Cash capital at holding reached EUR 1.7 billion, supported by EUR 392 million of free cash flow in the period. We are increasing the share buyback program for the second half year by EUR 150 million to EUR 350 million. Furthermore, we are announcing an interim dividend of EUR 0.21 per share, up 11% year-over-year. Finally, we continue to move at pace with our planned relocation to the U.S. We announced today that the extraordinary general meeting to seek shareholder approval for the move is targeted to take place on October 8th. I am now turning to slide 3 to run through the commercial performance of the Americas in more detail. Commercial momentum remains strong across Transamerica. At World Financial Group, we surpassed 100,000 licensed agents. More agents are producing and average premiums per policy have increased.

As a result, the distribution business has delivered 5% growth in life sales and 12% growth of annuity sales compared with the previous year period. In the savings and investments segment, retirement plans continued to perform well. Asset growth in IRA and stable value products supported revenue diversification and improved spreads. This resulted in an increase in the return on assets to 10 basis points in the first half of 2026. Written sales remained strong, especially in pooled plans, which is our sweet spot. Net deposits were negative in the first half of 2026, largely from a single contract termination following the client's merger with a peer. Within the individual life business, our entry into the instant decision market with a final expense product, and now also with an indexed and a universal life product, has been a remarkable success.

New life sales increased by 54% in the first half of 2026. Indexed annuity sales increased, helped by product enhancements that appeal to customers. I am now moving to slide 4 for an update on our other businesses. In our international segment, new life sales were broadly stable year-over-year. Growth in Brazil, driven by strong demand for individual risk products, was offset by lower sales in China from product repricing. Aegon Asset Management recorded third-party net inflows in both the global platforms and strategic partnerships businesses. As of 2026, Transamerica Asset Management, or TAM for short, is reported under Asset Management instead of the Americas. This business had net outflows in the first half of the year.

The global platforms operating margin increased by 5 percentage points to 20% compared with the prior year period, driven by lower expenses and higher revenues, which were supported by favorable market movements and net inflows over the past 12 months. Let us now turn to slide 5. We continue to execute our transition to the U.S. decisively. We have undertaken several key actions in the recent months. Number one, we announced the sale of Aegon UK, sharpening our focus on the U.S. market. Number two, we issued a $500 million senior unsecured bond to establish a U.S. dollar yield curve. Number three, we reached an agreement with our largest shareholder, the Vereniging Aegon, the Association Aegon, on our future relationship and presented a proposed U.S.-aligned governance framework. On the back of this announcement, we have hosted engagement meetings with investors to gather feedback on the proposal.

Number four, we are on track with the implementation of US GAAP and expect to start dry runs in the second half of the year. Overall, the transition is progressing at pace, on time and in budget. So far, we have booked roughly 40% of the EUR 350 million expenses we expect in relation to this transition. Looking forward, I am excited about the next steps in this transition. The next major milestone is the extraordinary general meeting targeted for October 8, where shareholders will vote on the relocation, governance amendments, and the new omnibus equity plan. Our goal is to align Aegon's governance with U.S. market standards and support the company's ambition to become a leading U.S. life insurance and retirement group. In the coming weeks, we will publish the EGM meeting agenda and other related documents, such as the SEC F4 filing.

We strongly encourage our shareholders to read these documents once they become available and to vote at the general meeting. Let's turn to page 6. Looking beyond the EGM, there is more to come. We selected New York City as the future location of our head office. I will personally be moving there in January 2027 to lead the transition of our company from its new center. I am excited that the board has extended my mandate through 2030 and that the shareholders have approved that to ensure continuity of management in this major transformation of the company. We are implementing the necessary leadership and organizational changes to support the future group structure. Will Fuller's role within the group has been broadened, and he will become President and Chief Operating Officer of Aegon as of January 2027, and this is in addition to his responsibilities as CEO of Transamerica.

Over the coming year, we will push forward the transition plans, gradually building the head office setup and processes till the end of 2027. We are moving at pace within a controlled and well-thought-through manner. I will now hand over to Duncan to discuss our financial performance in the first half of 2026 in more detail.

Thank you, Lars. I will walk you through the financial results for the first half of 2026, starting on slide 8. We have announced a robust set of financial results. The operating results increased by 9% over the prior year period to $804 million, with all of our units delivering higher results. Operating capital generation after holding and funding expenses increased by 27% year on year, and free cash flow amounted to EUR 392 million. As a reminder, we have excluded Aegon UK from the operating results, OCG, CSM, and free cash flow as the business is held for sale. Cash capital at holding increased to EUR 1.7 billion as the remittances were only partly offset by share buybacks. As a result of the lower share count and business performance, valuation equity per share increased by 4% in the reporting period. Our financial position remains extremely robust.

Gross financial leverage increased slightly to EUR 5 billion. This increase was driven by the issuance of a new senior unsecured note in April, exceeding the result of the tender offer on our subordinated notes. The group solvency ratio stood at 169% per June 30, 2026. The decrease compared with the year-end 2025 was largely driven by the loss of capital eligibility of perpetual cumulative subordinated bonds, as we had previously flagged. Moving to slide 9. Transamerica's operating result was $756 million and grew by 14% in local currency after correcting for the transfer of TAM, which moved to Aegon Asset Management. The operating result came in within the guidance we provided at the 2025 Capital Markets Day. Within Transamerica, we saw some positive developments. Distribution had an improved operating margin on a higher level of commissions, and this explains the strong operating result there.

The savings and investment result benefited from higher fees on assets under administration, which increased and from margin expansion in our general account stable value product. Protection Solution results have benefited from the growth in the portfolio, which drove CSM release, which more than offset higher onerous contract impacts. Financial assets improved from materially more favorable experience variances when compared with the first half of 2025, and overall continues to produce a financial return consistent with our previous guidance. The international segment benefited from growth in Brazil and favorable persistency experience in Transamerica Life Bermuda. Aegon Asset Management's operating result, excluding the transfer of Transamerica Asset Management, Inc., increased from an improved global platforms operating margin and higher revenues in strategic partnerships. This was a strong performance from the business, reflecting the efforts of our management team and staff.