31.03.2017
Wüstenrot & Württembergische AG DE0008051004
DGAP-News: Wüstenrot & Württembergische AG: W&W Group pleased with financial year 2016
DGAP-News: Wüstenrot & Württembergische AG / Key word(s): Final Results
Wüstenrot & Württembergische AG: W&W Group pleased with financial year 2016
31.03.2017 / 10:42
The issuer is solely responsible for the content of this announcement.
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- Forecast surpassed: Consolidated net earnings total approximately EUR235
million.
- Wüstenrot Bausparkasse increases net new business and gains market share
in a declining market.
- Property/casualty insurance increases gross premiums and further improves
combined ratio.
- W&W@2020 programme: New digital offers well received by customers.
- Jürgen A. Junker, Chairman of the Management Board, observes: "The W&W
Group has great potential, provided that we consistently use both our
traditional sales channels and the opportunities of digitisation."
Despite the persistently difficult market environment, the Wüstenrot &
Württembergische Group (W&W) achieved good results in the 2016 financial
year. Last year, the expert for financial provisions generated consolidated
net profit of EUR235.3 million. Thus, the forecast of at least EUR220
million was comfortably reached. In its divisions including the home loan
and savings business, part of the new business outperformed the sector
trend. New products and services were taken up positively by the customers,
especially due to the intensified development of the digital offers. For
2017, the W&W Group expects further growth in new business along with
continued high investments in digitisation.
"In view of the persistently low interest rates, changed customer
expectations and increasing regulation, the results of 2016 are more than
respectable" says Jürgen A. Junker, Chairman of the Executive Board of W&W
AG since 1 January 2017. All product categories and all sales channels
contributed to the bottom line - our own sales forces, partnerships,
brokers, and direct sales. Junker adds: "However, we must not stop at this
point. In the coming years, our focus will greatly depend on duly handling
the question of which products and which channels are most suitable for our
existing customers and potential new customers. In this context, our
successful traditional sales channels are just us important as the digital
approaches in which we plan to invest about EUR100 million in the next three
years. The objective is to establish our Group as a modern platform in the
fields of financial provisions, housing and savings."
Key indicators of the Group for 2016
- Consolidated net profit amounted to EUR235.3 million. As planned, the
figure remained below last year's record figure of EUR274.3 million, but was
nevertheless higher than we had expected.
- As in the previous year, the property/casualty insurance segment provided
the greatest net income contribution of EUR108.3 million (2015: EUR114.9
million). This figure reflects the improved underwriting income as a result
of a sustainable, risk-conscious underwriting policy.
- Compared to 2015, the profit contributions of the Home Loan and Savings
Bank and Life and Health Insurance segments were higher in 2016.
- Mainly due to the low interest rates, net financial income amounted to
EUR1.82 billion (previous year: EUR2.03 billion).
- Benefits paid under insurance contracts dropped to EUR4.08 billion (2015:
EUR4.28 billion). This was partly due to the favourable claims history in
property insurance.
- Despite the higher contributions to the deposit guarantee and high IT
investments, steadfast cost management resulted in a reduction of general
administrative expenses by about 3% to approximately EUR1.08 billion.
Stable dividend planned
The Executive Board and the Supervisory board propose to the Annual General
Meeting on 1 June 2017 to pay a dividend of EUR0.60 per W&W share, as in the
previous year. This would mean a distribution of about EUR56 million.
Calculated on the basis of the year-end price of the share, which has been
listed in the SDAX since 21 March 2016, the dividend yield would amount to
an attractive 3.2%.
Performance of the divisions in 2016
Home Loan and Savings Bank
In 2016, the net new business of Wüstenrot Bausparkasse increased almost 2%
to EUR11.9 billion. This growth took place despite the drop of 9% in net new
business throughout the sector in general. Wüstenrot managed to expand its
market share significantly, reinforcing its position as the sector's Number
Two. The future-oriented Wüstenrot "Wohnsparen", a concept that was
introduced in February 2016 and that further develops conventional home loan
and savings schemes, was a key success driver. Wüstenrot Bausparkasse's
multiple award-winning Riester offer (Wüstenrot Wohn-Riester) also benefited
from the good performance of Wüstenrot Wohnsparen. The gross new business
amounted to EUR13.6 billion (previous year: EUR14.1 billion).
In the field of construction financing, the new business throughout the
group amounted to almost EUR5.4 billion in new business, 1.6% less than in
the previous year. Thus, Wüstenrot outperformed the sector in general (-4%).
Insurance
Gross premiums written in property and casualty insurance increased by
another 2.4% to EUR1.68 billion. The new business amounted to EUR207.9
million, a figure close to that of the previous year (-0.9%). In the private
customer field, Württembergische Versicherung launched new modular rates for
accident, household and building cover. The growth in the corporate customer
segment was mainly borne by the core product "company policy", whose scope
was further expanded, e.g. by including photovoltaic plants of commercially
utilised buildings. In 2016, the cautious underwriting policy and the
resulting good net income performance led to a further improvement of the
gross combined ratio to 90.1% (previous year: 92.1%; 2014: 95.5%).
Gross premiums written in life insurance dropped 3.5% to about EUR2.10
billion. The decrease was caused by the declining new business in the
generally shrinking market and portfolio losses. Last year, Württembergische
Lebensversicherung supplemented its product offer with new, optimised risk
life insurance rates with Premium, Compact and Combined protection. Since
October 2016, it has also been possible to buy Compact and Premium online.
Gross premiums written in health insurance increased more than 9% to some
EUR216 million in 2016. This good growth is mainly attributable to the
success of the supplementary health and long-term care rates of
Württembergische Krankenversicherung, which regularly win awards in product
tests.
Digital product innovation on the march
Last year, the W&W Group expanded its range of digital offers under the
W&W@2020 programme. These offers supplement the successful conventional
sales channels of our own mobile sales force and of the sales forces of
cooperation partners. Following the central bundling of the construction
financing business at Wüstenrot Bausparkasse, Wüstenrot Bank AG now
concentrates entirely on its role as a digital bank for private customers
with an attractive product offer in the account, card and securities
business, which can also be accessed online.
In 2016, W&W customers made use of video advice more than 2,000 times. This
usually takes place when they visit their local advisor in order to reinvest
maturing assets and simply ask for an investment advisor of Wüstenrot Bank
to join in via Skype. The conversion rate from such video consulting is
close to 60%.
In autumn 2016, Wüstenrot Bank introduced computer-aided advice technology
(robo-advising). For example, an automated fund management routine
continually optimises the investment strategy selected by the client for the
"Wüstenrot ETF Managed Custody Account". As a result, our gross fund sales
in the retail business went up by more than 7% to EUR381 million. The number
of customer custody accounts increased more than 5% to almost 79,000.
Jürgen A. Junker, Chairman of the Executive Board of W&W, notes: "The
Internet has massively changed people's purchasing behaviour, also in the
field of financial products. Generally, we want to become even more agile
and mobile in order to gain the online-oriented target group as new
customers while continuing to fulfil the expectations of our existing
customers, who appreciate the high quality of our advisory services. The W&W
Group will make a determined effort to shape its future positively."
Outlook for the 2017 financial year
In view of the ongoing real estate boom in Germany, Wüstenrot expects 2017
to see growth in the fields of home loan and savings and construction
financing. Württembergische is also positive as to the performance of the
insurance business. The high investments under the W&W@2020 programme will
continue for the purpose of reaching new customers and market segments
through all sales channels, supporting the growth strategy of the W&W Group.
Against this backdrop, the Executive Board is confident that the
consolidated profit for 2017 will reach a similar level as in 2016.
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31.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a
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The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Wüstenrot & Württembergische AG
Gutenbergstrasse 30
70176 Stuttgart
Germany
Internet: www.ww-ag.com
ISIN: DE0008051004
WKN: 805100
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Stuttgart;
Regulated Unofficial Market in Berlin, Dusseldorf,
Tradegate Exchange
End of News DGAP News Service
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560675 31.03.2017
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