The Netherlands-based Eureko group announced record profits for 2004. Consolidated net income, which includes capital gains, rose to 1.153 billion euros ($1.54 billion), while net income excluding capital gains doubled to 486 million euros ($650 million) from 243 million euros ($325 million) for the same period in 2003.
In a separate bulletin the Group announced that its Supervisory Board had accepted the resignation of Chairman and CEO, Gijsbert Swalef, effective October 1, 2005. He will be succeeded by Maarten Dijkshoorn, presently Vice Chairman of the company.
Other earnings highlights announced by the Group included:
— Operating result (based on long-term returns*) of 564 million euros ($754 million), compared with 308 million ($412 million) for the same period in 2003.
— Gross written premiums increased, to 6.209 billion ($8.307 billion), compared with 5.656 billion euros ($7.567 billion) in 2003.
— Shareholders’ equity increased by more than 2.2 billion euros ($2.94 billion), to 4.093 billion euros ($5.476 billion), from 1.814 billion euros ($2.427 billion) at year-end 2003.
— The debt leverage ratio decreased to 11 percent from 36 percent (debt as part of debt and shareholders’ equity combined).
— Return on equity improved from 14.2 percent in 2003, to 16.5 percent in 2004 (excluding capital gain from Group transactions 2004).
–Earnings per share increased by 77 percent, from 1.22 euros ($1.63) per share in 2003, to 2.16 euros ($2.89) per share in 2004 (excluding capital gain from Group transactions).
–Proposed dividends of 184 million euros ($246 million) or 83 euro cents ($1.11) per ordinary share. In addition, a ‘transaction (extra) dividend’ of 1.13 euros ($1.52) per ordinary share has already been declared and distributed.
The Group’s announcement noted: “There has been a strong improvement in results in the last two years, which serves to underline Eureko’s solid financial position, and is also an endorsement of the success of the re-structuring programme that began in 2003 and which has continued throughout the past year. In assessing our businesses and our future development plans, it was decided to concentrate our strategic focus on our insurance and insurance-related businesses. To this end we reduced our exposure to asset management through the merger of F&C with ISIS Asset Management, and by the sale of our Greek Asset manager, Intertrust, to EFG Eurobank Ergasias. We have divested non-core banking operations by selling Europabank in Belgium, the commercial property finance portfolio in The Netherlands, and have re-positioned Staalbankiers to focus on private banking in The Netherlands.
“Overall, we have experienced excellent results in our Non-Life insurance business, due mainly to an excellent claims ratio and strict underwriting policies. The improved performance is also a result of the strict cost controls introduced. We have also taken steps to strengthen our intermediary business in The Netherlands through the merger with Levob, and the acquisition of the health portfolio of AXA.”
The complete earnings report and further comments can be accessed on the group’s Website at: www.eureko.net.
The announcement of Swalef’s departure noted that he had “made an outstanding contribution to the success of Eureko. He was asked to return to the company as Chairman and CEO in 2002, at a difficult time in the company’s history. He was, at that time – and remains – Chairman of the Achmea Association, which is Eureko’s major shareholder. He will also remain as an advisor to the Eureko Executive Board until publication of the 2005 annual results, in March/April 2006.”
The company acknowledged that he was largely responsible for the achievement of a “remarkable turnaround in its fortunes, from the disappointing results of 2002, to the excellent results released today.”
The announcement noted: “CEO nominee, Maarten Dijkshoorn (1950), joined the Achmea Board as COO in 2002, from the ING Group. He then became a member of the Eureko Executive Board in 2003. He has been instrumental in the re-structuring of its largest Operating Company, Achmea, and has brought a new focus and energy to the Group.” He began his professional career at Nationale Nederlanden in The Netherlands, and continued there, holding various positions, the last of which was CFO, until he became a member of the Achmea Board and COO in 2002. He holds a number of directorships, both in The Netherlands and abroad.”
In addition to the Executive Board changes, Eureko also announced that the size of the Supervisory Board will be reduced to ten. At the annual general meeting, on 30 March 2005, a number of members will step down (including the Chairman, Mr. Johan de Veer). “Eureko wishes to express its thanks to Mr. de Veer, who served as Chairman of Eureko/Achmea for many years and made a significant contribution to the development of the Group,” the bulletin said. It is proposed to appoint Mr. A.H.C.M. (Arnold) Walravens as Chairman of the Supervisory Board.
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