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Aviva plc 2013 Preliminary Results

LONDON, UNITED KINGDOM--(Marketwired - Mar 6, 2014) -

Start of part 1 of 5 News Release Aviva plc 2013 Preliminary Announcement Aviva plc 2013 Preliminary Results Announcement Cash flow - Cash remittances1 to Group up 40% at GBP1,269 million2 (FY12:GBP904 million) - Operating capital generation1 GBP1,772 million (FY12: GBP1,859 million) - Remittance ratio 72%1,2 (FY12: 49%) - Final dividend per share 9.4p (FY12:9p). Full year dividend per share 15p. Profit - Operating profit1 6% higher at GBP2,049 million (FY12: GBP1,926 million) - IFRS profit after tax GBP2,151 million (FY12: loss after tax GBP2,934 million) Expenses - Operating expenses GBP3,006 million1,3, down 7% - GBP360 million cost savings already achieved - 2013 cost savings ahead of plan Value of - Value of new business5 up 13% at GBP835 million new (FY12:GBP 738 million) business - Poland, Turkey and Asia5 contributed 21% of Group VNB (FY12: 16%) and collectively grew 49% Combined - Combined operating ratio 97.3% (FY12: 97.0%) operating - 2014 flood losses of GBP60 million in the UK in January ratio and February, in line with long term average Balance - Intercompany loan reduced by GBP1.7 billion to sheet GBP4.1 billion at end of February 2014 (FY12:GBP5.8 billion) - Agreed plan to reduce inter-company loan to GBP2.2 billion by end of 2015, utilising GBP450 million of existing cash resources and GBP1.45 billion of other actions - Liquidity of GBP1.6 billion at end of February 2014 - Economic capital surplus4 GBP8.3 billion (FY12: GBP7.1 billion4), coverage ratio 182% - IFRS net asset value per share 270p (FY12:278p) - MCEV net asset value per share 445p (FY12:422p) Mark Wilson, Group Chief Executive Officer, said:"The turnaround at Aviva is intensifying. We have focused the business on 'cash flow plus growth' and the benefits are starting to be reflected in our performance. Cash flows to the Group are up 40%, operating expenses are down 7%, operating profit is up 6% and Value of New Business is up 13%. After a GBP2.9 billion loss after tax last year, Aviva has delivered a GBP2.2 billion profit."Following our exit from a number of low margin, underperforming or non-strategic businesses, Aviva is simpler, more focused and better managed. We have significantly improved our capital surplus, increased our liquidity and have a stronger leadership team."Although we have made progress in 2013, I want to guard against complacency. Aviva still has issues to address. Have we made progress? Yes, some. Is it a little faster than anticipated? Probably. Have we unlocked the full potential at Aviva? Not yet." 1 On a continuing basis, excluding US Life and Delta Lloyd 2 Cash remittances include amounts received from UK General Insurance in January 2014 in respect of activity in 2013. 3 Operating expenses excludes integration and restructuring costs and US Life 4 The pro forma surplus at FY12 included the benefit of disposals and an increase in pension scheme risk allowance from five to ten years of stressed contributions. The economic capital surplus represents an estimated position. The capital requirement is based on Aviva's own internal assessment and capital management policies. The term 'economic capital' does not imply capital as required by regulators or other third parties. 5 Excluding Malaysia and Sri Lanka. Key financial metrics Cash Cash remitted to Operating capital Group generation Restated1 2013 2012 Sterling% 2013 2012 Sterling% Continuing operations, GBPm GBPm change GBPm GBPm change excluding Delta Lloyd United Kingdom & Ireland Life 370 150 147% 595 688 (14)% United Kingdom & Ireland general insurance & health2 347 150 131% 374 376 (1)% Europe 388 343 13% 558 571 (2)% Canada 130 136 (4)% 177 192 (8)% Asia and Other 34 125 (73)% 68 32 113% Total 1,269 904 40% 1,772 1,859 (5)% Operating profit: IFRS basis Restated1 2013 2012 Sterling% Continuing operations, excluding Delta Lloyd GBPm GBPm change Life business 1,901 1,831 4% General insurance and health 797 894 (11)% Fund management 93 51 82% Other* (742) (850) 13% Total 2,049 1,926 6% * Includes other operations, Corporate Centre costs and Group debt and other interest costs. Expenses 2013 2012 Sterling% Continuing operations GBPm GBPm change Operating expenses 3,006 3,234 (7)% Integration & restructuring costs 363 461 (21)% Expense base 3,369 3,695 (9)% Value of new business 2013 2012 Sterling% Continuing operations GBPm GBPm change United Kingdom 435 420 4% Ireland 6 (8) 175% France 166 119 39% Poland 51 35 46% Italy 15 29 (48)% Spain 33 56 (41)% Turkey & Other Europe 38 32 19% Asia - excluding Malaysia & Sri Lanka 91 55 65% Value of new business - excluding Malaysia & Sri Lanka 835 738 13% Malaysia & Sri Lanka 1 8 (88)% Value of new business 836 746 12% General insurance combined operating ratio Continuing operations 2013 2012 Change United Kingdom & Ireland 97.2% 98.6% (1.4)pp Europe 98.1% 99.4% (1.3)pp Canada 94.6% 93.4% 1.2pp General insurance combined operating ratio 97.3% 97.0% 0.3pp IFRS Profit after tax 2013 2012 Sterling% GBPm GBPm change IFRS profit/(loss) after tax 2,151 (2,934) n/a Dividend 2013 2012 Final dividend 9.4p 9.0p Total dividend per share 15.0p 19.0p Capital position Pro forma4 2013 2012 2012 GBPbn GBPbn GBPbn Estimated economic capital surplus3 8.3 5.3 7.1 Estimated IGD solvency surplus3 3.6 3.8 3.9 IFRS net asset value per share 270p 278p MCEV5 net asset value per share 445p 422p 1 The Group adopted the amendments to IAS19 and IFRS10 during the period and the requirements of the revised standards have been applied retrospectively. 2 Cash remittances include amounts received from Aviva Insurance Limited in January 2014 in respect of 2013 activity. 3 The economic capital surplus and IGD solvency surplus represent an estimated position. The economic capital requirement is based on Aviva's own internal assessment and capital management policies. The term 'economic capital' does not imply capital as required by regulators or other third parties. 4 The pro forma economic capital and IGD surplus at FY12 includes the benefit of completing the US Life, Aseval, Delta Lloyd and Malaysia transactions and, for economic capital only, an increase in pension scheme risk allowance from five to ten years of stressed contributions. 5 In preparing the MCEV information, the directors have done so in accordance with the European Insurance CFO Forum MCEV Principles with the exception of stating held for sale operations at their expected fair value, as represented by expected sale proceeds, less cost to sell. Click on, or paste the following link into your web browser, to view the associated PDF document. http://www.rns-pdf.londonstockexchange.com/rns/6420B_1-2014-3-5.pdf Contacts Investor contacts Media contacts Timings Colin Simpson Nigel Prideaux Results and presentation slides +44 (0)20 7662 8115 +44 (0)20 7662 0215 06:30 hrs GMT www.aviva.com David Elliot Andrew Reid +44 (0)20 7662 8048 +44 (0)20 7662 3131 Real time media conference call 07:30 hrs GMT Sarah Swailes +44 (0)20 7662 6700 Analyst presentation 08.30 hrs GMT Live webcast 08:30 hrs GMT www.avivawebcast.com/prelim2013/ End of part 1 of 5 This information is provided by RNS The company news service from the London Stock Exchange END