FIIG - The Fixed Income Experts

News and Education

AXA released their FY14 results with a headline profit after tax of €5.0bn

by Justin McCarthy | Mar 03, 2015
Published 25 February 2015

Highlights of the result include:

  • Total revenue up 3% to €92bn
  • Underlying Earnings up 8% to €5.1bn
  • Bottom line net income after tax up 12% to €5.0bn (slightly below market consensus)
  • Free cash flow up 9% to €5.5bn
  • Similar to insurers globally an increased dividend (up 17% on FY13) given high capital levels
  • Debt gearing remained unchanged at a low 24%
  • Solvency I ratio (a key measure of financial strength and capital levels) was up significantly from 221% at FY13 to 266% at FY14, driven by the impact of lower interest rates and strong contribution from underlying earnings
  • Shareholder’s equity of €65.2bn at FY14 versus €52.9bn at FY13
  • Total assets of €840.1bn at FY14 up from  €755.4bn at FY13

To view full details of the results on the AXA website click here.

The first slide of the results presentation entitled, "AXA at a glance in 2014" (pictured below) is a good reminder of AXA’s size and stature in the global insurance market.  

Relative value:

The results were broadly in-line with market expectations and we do not expect any material change in AXA’s credit spreads following the release. We remain comfortable with the AXA credit but highlight that AXA is one of the largest financial entities in Europe and as such will be impacted should there be a significant decline in the health European (and/or French) economy. On the positive side, it is a major beneficiary of the European Central Bank’s quantitative easing program, in part via its large holdings of government, financial and other highly rated bonds.

The AXA AUD Tier 1 securities are considered fair value, however are relatively short dated given our expectation of call in October 2016. Investors may consider taking profits on the AUD Tier 1 securities and extending maturities into other AUD bonds to improve returns. Those comfortable with non-AUD exposure may consider longer dated ‘old-style’ subordinated debt and Tier 1 securities that are offering attractive returns in the fours and five percent range depending on the currency, structure and first call date.

Source: AXA

Copyright The contents of this document are copyright. Other than under the Copyright Act 1968 (Cth), no part of it may be reproduced or distributed to a third party without FIIG’s prior written permission other than to the recipient’s accountants, tax advisors and lawyers for the purpose of the recipient obtaining advice prior to making any investment decision. FIIG asserts all of its intellectual property rights in relation to this document and reserves its rights to prosecute for breaches of those rights.

Disclaimer Certain statements contained in the information may be statements of future expectations and other forward-looking statements. These statements involve subjective judgement and analysis and may be based on third party sources and are subject to significant known and unknown uncertainties, risks and contingencies outside the control of the company which may cause actual results to vary materially from those expressed or implied by these forward looking statements. Forward-looking statements contained in the information regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Opinions expressed are present opinions only and are subject to change without further notice.

No representation or warranty is given as to the accuracy or completeness of the information contained herein. There is no obligation to update, modify or amend the information or to otherwise notify the recipient if information, opinion, projection, forward-looking statement, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

FIIG shall not have any liability, contingent or otherwise, to any user of the information or to third parties, or any responsibility whatsoever, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance or completeness of the information. In no event will FIIG be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of the user using information even if it has been advised of the possibility of such damages.

FIIG Securities Limited (‘FIIG’) provides general financial product advice only. As a result, this document, and any information or advice, has been provided by FIIG without taking account of your objectives, financial situation and needs. FIIG’s AFS Licence does not authorise it to give personal advice. Because of this, you should, before acting on any advice from FIIG, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If this document, or any advice, relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a product disclosure statement relating to the product and consider the statement before making any decision about whether to acquire the product. Neither FIIG, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice. FIIG, its staff and related parties earn fees and revenue from dealing in the securities as principal or otherwise and may have an interest in any securities mentioned in this document. Any reference to credit ratings of companies, entities or financial products must only be relied upon by a ‘wholesale client’ as that term is defined in section 761G of the Corporations Act 2001 (Cth). FIIG strongly recommends that you seek independent accounting, financial, taxation, and legal advice, tailored to your specific objectives, financial situation or needs, prior to making any investment decision. FIIG does not make a market in the securities or products that may be referred to in this document. A copy of FIIG’s current Financial Services Guide is available at

An investment in notes or corporate bonds should not be compared to a bank deposit. Notes and corporate bonds have a greater risk of loss of some or all of an investor’s capital when compared to bank deposits. Past performance of any product described on any communication from FIIG is not a reliable indication of future performance. Forecasts contained in this document are predictive in character and based on assumptions such as a 2.5% p.a. assumed rate of inflation, foreign exchange rates or forward interest rate curves generally available at the time and no reliance should be placed on the accuracy of any forecast information. The actual results may differ substantially from the forecasts and are subject to change without further notice. FIIG is not licensed to provide foreign exchange hedging or deal in foreign exchange contracts services. The information in this document is strictly confidential. If you are not the intended recipient of the information contained in this document, you may not disclose or use the information in any way. No liability is accepted for any unauthorised use of the information contained in this document. FIIG is the owner of the copyright material in this document unless otherwise specified.

The FIIG research analyst certifies that any views expressed in this document accurately reflect their views about the companies and financial products referred to in this document and that their remuneration is not directly or indirectly related to the views of the research analyst. This document is not available for distribution outside Australia and New Zealand and may not be passed on to any third party without the prior written consent of FIIG. FIIG, its directors and employees and related parties may have an interest in the company and any securities issued by the company and earn fees or revenue in relation to dealing in those securities.