AEG

Business Context and Reporting Period

Company: Aegon Ltd.
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: Second Half (2H) 2024, ending December 31, 2024.
Context: Aegon is an international financial services holding company with operations in the Americas, United Kingdom, and International markets (Spain & Portugal, China, Brazil), alongside a global asset management business. The company is executing a transformation strategy to reduce capital employed in "Financial Assets" and grow "Strategic Assets."

Key Financial Metrics (2H 2024)

Material Changes vs. Prior Period

• Profitability Surge: Net profit turned positive at EUR 741 million, driven by a EUR 776 million operating result (up 14% YoY) and a EUR 299 million gain from the a.s.r. stake, partially offset by EUR 163 million in net impairments and restructuring charges.
• US Performance: The Americas operating result increased 15% to EUR 553 million. This was driven by improved experience variance and business growth in Strategic Assets (Distribution, Savings & Investments, Protection Solutions), despite a decline in Financial Assets due to onerous contracts.
• Capital Generation: Full-year 2024 Operating Capital Generation met the increased guidance of EUR 1.2 billion. Full-year Free Cash Flow was EUR 759 million, exceeding the guidance of >EUR 700 million.
• Impairments: Net impairments of EUR 163 million were recorded, primarily in the Americas (EUR 166 million), driven by increased expected credit loss (ECL) reserves for bonds and mortgages due to pessimistic economic scenarios.
• Dividend Proposal: A final dividend of EUR 0.19 per share is proposed, a 19% increase over the 2023 final dividend, bringing the total 2024 dividend to EUR 0.35 per share.

Guidance, Outlook, and Management Commentary

• 2025 Targets: Aegon remains on track to meet 2025 targets set at the 2023 Capital Markets Day (CMD).
  • OCG Target: ~EUR 1.2 billion.
  • Free Cash Flow Target: ~EUR 800 million.
  • Dividend Target: ~EUR 0.40 per share.
  • Leverage: Gross financial leverage expected to remain around EUR 5 billion.
• Strategy Update: A new strategy and group targets will be presented at the next CMD on December 10, 2025, in London.
• Share Buybacks: A EUR 200 million buyback was completed in December 2024. A new EUR 150 million buyback program commenced in January 2025.
• Business Highlights:
  • Americas: World Financial Group (WFG) agents grew 17% to 86,142. Retirement Plans saw outflows but mid-sized plans grew. Universal Life purchase program completed ahead of schedule.
  • UK: Workplace platform net deposits reached GBP 3.7 billion. Adviser platform outflows continue, with a strategy to return to growth by 2028.
  • Asset Management: Returned to growth with EUR 14 billion in third-party net deposits.

Investor Verification Checklist

• Impairment Drivers: Verify the specific economic scenarios and asset classes driving the EUR 163 million in net impairments, particularly in the US bond and mortgage portfolios.
• Financial Assets Run-off: Confirm the progress of reducing capital employed in Financial Assets to the target of USD 2.2 billion by end-2027, given the recent unfavorable impacts from onerous contracts.
• Retirement Plan Flows: Assess the sustainability of the Retirement Plans business given the significant net outflows (USD 15.9 billion in 2H 2024) driven by large-market plan discontinuances.
• Dividend Approval: Monitor the Annual General Meeting (June 12, 2025) for shareholder approval of the proposed EUR 0.19 final dividend.
• Capital Ratios: Track the US RBC ratio (currently 443%) to ensure it remains above the 400% operating level, noting its increased sensitivity to market movements.