AXA announces its 2024-2026 strategy, setting ambitious new financial targets
February 22, 2024
published at 7:05 AM CET
AXA publishes today its strategic plan “Unlock the Future” and its key financial targets for 2024-2026.
- The new Plan is focused on growing and strengthening AXA’s core businesses, with continued disciplined execution, following strong delivery of “Driving Progress 2023”
- Increased main financial targets for 2024-2026
- Underlying earnings per share* CAGR** 2023-2026E between 6% and 8%
- Underlying return on equity* between 14% and 16% over 2024E to 2026E
- Over Euro 21 billion cumulative organic cash upstream over 2024E to 2026E - New capital management policy*** with a total payout ratio**** target of 75% of underlying earnings per share, comprising 60% dividend payout ratio and 15% via annual share buy-back*****, and with dividend per share to be at least equal to prior year
Thomas Buberl
Chief Executive Officer of AXA
AXA enters its new strategic plan in a position of strength. We have transformed the Group and delivered consistent execution of our “Driving Progress 2023” Plan, building a strong earnings and capital distribution track record, while maintaining a robust balance sheet.” “Today we have an attractive business model, with leading and scaled businesses balanced between Commercial and Retail lines, focused on predictable underwriting risks and high cash generation.
I am confident in our strategy which has delivered, even in a difficult environment. We have deep technical expertise, superior agent distribution, and a scalable technology infrastructure. Building on this, our new “Unlock the Future” plan will be focused on growing and strengthening our core businesses, with rigorous execution. We aim at scaling organic growth, as well as technical and operational excellence across all our businesses, leveraging clear and proven initiatives across P&C Commercial lines, Employee Benefits and Individual Health, and Retail insurance.
AXA intends to deliver predictable and sustained earnings, cash, and capital. For our new plan, we are setting the bar higher across all our financial targets. Reflecting the strength of our model, I am also pleased to announce a new capital management policy offering a 75% total payout ratio, including an increase in dividend payout to 60% and a commitment to annual share buy-backs. We remain focused on delivering value to our shareholders, by providing both attractive capital return and growth in book value as we continue to invest in our high-quality businesses.
In line with our purpose, we also remain firmly committed to help building a resilient society by putting at the core of our strategy financial inclusion and climate transition. Together with the strong engagement of our people and our partners, AXA is committed to bringing value to all our stakeholders over the long term.
* Underlying earnings”, “underlying earnings per share”, “underlying return on equity”, “combined ratio” and “debt gearing” are APMs as defined in ESMA’s guidelines and the AMF’s related position statement issued in 2015. A reconciliation from APMs “underlying earnings” and “combined ratio” to the most directly related line item, subtotal, or total in the financial statements of the corresponding period is provided on pages 25 and 26 of AXA’s Activity Report as of and for the year ended December 31, 2023 (“AXA’s 2023 Activity Report”). APMs “underlying return on equity” and “underlying earnings per share” are reconciled to the financial statements in the tables set forth on page 39 of AXA’s 2023 Activity Report. The calculation methodology of “debt gearing” is set out on page 44 of AXA’s 2023 Activity Report. For further information on the above-mentioned and other non-GAAP financial measures used in this press release, see the Glossary set forth on pages 42 to 47 of AXA’s 2023 Activity Report.
**Compounded Annual Growth Rate; period-to-period results may vary.
***Subject to annual Board and Shareholders’ Annual General Meeting approvals and absent (1) for share buy-backs, any significant earnings event (i.e., significant deviation in the Group’s underlying earnings) and (2) for dividends, the occurrence of a significant capital event (i.e., event that significantly deteriorates Group solvency). Board discretion includes taking into account AXA’s earnings, financial condition, applicable capital and solvency requirements, prevailing operating and financial market conditions and the general economic environment.
****Payout based on underlying earnings per share.
*****Annual share buy-backs exclude share buy-backs related to the neutralization of earnings dilution from disposal and in-force management transactions, as well as the dilutive effect relating to employee share offerings and the exercise of stock options.
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