Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on MUENCHENER RUECKVER AG-REG. We currently have 10 research reports from 1 professional analysts.
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MUENCHENER RUECKVER AG-REG
MUENCHENER RUECKVER AG-REG
New disappointing profit target and new share buy-back programme for FY2017 released
15 Mar 17
Munich Re released, together with its annual report for 2016, business targets for 2017 and a new share buy-back programme. The group is aiming for a consolidated result of €2.0bn to €2.4bn for FY2017 assuming no large unexpected claims or severe currency and capital market developments. In reinsurance, the consolidated result for 2017 should be in the range of €1.8bn to €2.2bn. For ERGO’s field of business, Munich Re projects a consolidated result for 2017 in the order of €150m to €200m. It expects that, for the financial year 2017, its gross premiums written will be €48bn to €50bn. For p&c reinsurance, Munich Re’s target is a reduced combined ratio by 1ppt to around 97% of net earned premiums. Munich Re anticipates major losses of the order of around €2bn, corresponding to an unchanged 12% of net earned premiums for FY2017. In p&c primary insurance, the combined ratio for 2017 should be approximately 99% for Germany and 98% for International segment. Munich Re expects a total investment result of around €7bn, representing a return on investments of about 3%. Munich Re has announced a further share buy-back programme: before the Annual General Meeting on 25 April 2018, shares with a volume of up to €1bn are to be repurchased. The current share buy-back programme is to be concluded by the time of the Annual General Meeting on 27 April 2017.
FY2016 results in line but dividend increase announced
07 Feb 17
Munich Re has commented on the 1 January agreement renewals and released some preliminary figures regarding its Q4 16 and FY2016 business. Net profit was down from €0.7bn for Q4 15 to €0.5bn for Q4 16. Munich Re’s preliminary net profit for FY2016 was €2.6bn compared to €3.1bn for FY2015. Gross premiums written by the group in FY2016 declined by 3% to €48.9bn. The investment result was up by 1% to €7.6bn for FY2016 compared to FY2015. Operating profit under the company definition decreased by 17% to €4.0bn for FY2016. Group equity was up by around €0.8bn to €31.8bn at the end of 2016. RoE was 8.1% for FY2016 compared to 10.0% for FY2015. The dividend proposal for FY2016 increased to €8.60 compared to €8.25 per share for FY2015. Munich Re has released a few preliminary key figures for FY2016 which are in line with our forecasts with the exception of the dividend proposal. The net profit is slightly below the consensus forecast. The preliminary FY2016 segment figures are mixed. Net profit of the p&c reinsurance business declined by 31% to €2.0bn for FY2016 as a major-loss burden increased from €1.0bn to €1.5bn for FY2016. But the major losses were below the budget for FY2016. Munich Re was also able to release loss reserves of €1.1bn in 2016 for prior accident years compared to €1.4bn in FY2015. The combined ratio rose from 89.7% for FY2015 to 95.7% for FY2016. Munich Re has not released a group net profit target for FY2017 so far. The detailed financial results for the 2016 full year are due on 15 March.
Good Q3 results lead to guidance upgrade
09 Nov 16
Net profit attributable to shareholders increased by 32% to €685m for Q3 16 compared to Q3 15. Gross premiums written were down by 1% at €12.3bn in Q3 16 compared to the same period last year. At constant currency, the premium volume would have slightly risen by 0.2%. Expenses for claims rose by 0.5% to €9.7bn in Q3 16. The technical result decreased by 5% to €817m for Q3 16 compared to Q3 15. The investment result increased by 54% to €1.86bn in Q3 16 compared to Q3 15. The annualised RoI was 3.4% for 9M 16 compared to 3.3% for the same period last year. The other non-operating result was a loss of €112m for Q3 16 compared to a loss of €97m in Q3 15. Pre-tax profit doubled to €848m for Q3 16. The tax rate was 19% for Q3 16 compared to a tax credit of €101m for Q3 15. This is the reason behind the lower increase of net profit for Q3 16 compared to pre-tax profit. Shareholders’ equity was up by 4.5% to €32.4bn at the end of September 2016 compared to the end of 2015. The return on equity was 8.5% for Q3 16 compared to 6.9% for Q3 15. Munich Re increased its profit outlook of €2.3bn for FY2016 after a net profit of €2.1bn for 9M 16. It now expects profit for FY2016 to exceed the old target significantly.
Q2 profit much ahead of consensus and guidance is likely an exception
09 Aug 16
Net profit attributable to shareholders decreased by 9% to €975m for Q2 16 compared to Q2 15, but it increased by 127% compared to Q1 16. Gross premiums written were down by 4% at €11.9bn in Q2 16 compared to the same period last year, at constant currency the premium volume would have fallen by 1.4%. Expenses for claims rose by 4% to €10.1bn in Q2 16. The technical result decreased by 2% to €934m for Q2 16 compared to Q2 15 but was much better than the loss of €219m for Q1 16. The investment result increased by 27% to €2.78bn in Q2 16 compared to Q2 16. The annualised RoI was 4.7% for Q2 16 compared to 4.1% for the same period last year. The other non-operating result was a loss of €120m for Q2 16 compared to a loss of €432m in Q2 15, mainly due to positive forex effects. Pre-tax profit declined by 4% to €1.28bn for Q2 16. The tax rate was 24% for Q2 16 compared to 19% for Q2 15. Shareholders’ equity was up by 3.4% to €32.0bn at the end of June 2016 compared to the end of 2015. The return on equity was 12.2% for Q2 16 and 13.1% for Q2 15 and 5.6% for Q1 16. Munich Re confirmed its guidance of €2.3bn for FY2016 (downgraded in May from a €2.3-2.8bn range) despite the H1 16 profit of €1.4bn.
Ergo restructuring programme
01 Jun 16
Ergo, the primary insurance subsidiary of Munich Re, released some details of the announced restructuring programme. Ergo will invest a total net figure of €1bn up to 2020. It plans to lower its cost basis by around €540m gross (around €280m net) by 2020. The measures will lead to the loss of around 1,800 jobs in Germany. The one-off expenses attributable to 2016, which will have an impact of around €300m on Ergo’s result. Due to the investments attributable to 2016, Ergo’s result for the ongoing financial year should be slightly negative. In the years to follow, savings and additional earnings potential will increasingly offset the investments made. For 2017, Ergo expects its result to return to a distinctly positive level. From 2021 at the latest, Ergo expects its annual net profits to contribute more than €500m to Munich Re’s result on a long-term basis.
Q1 figures are disappointing, peers released better figures
10 May 16
Net profit attributable to shareholders decreased by 45.5% to €430m for Q1 16 compared to Q1 15. Gross premiums written were down by 4% to €12.5bn in Q1 16 compared to the same period last year. At constant exchange rates, the rate of change would have been down by 2%. Expenses for claims declined by 12% to €9.0bn in Q1 16. The technical result rose by 3.6% to €945m for Q1 16 compared to Q1 15. The investment result decreased by 14% to €1.6bn in Q1 16 compared to Q1 15. The annualised RoI was 2.7% for Q1 16 compared to 3.0% for the same period last year. The other non-operating result was a loss of €88m in Q1 16 compared to a profit of €6m in Q1 15. Pre-tax profit declined by 37% to €593m in Q1 16 compared to Q1 15. The tax rate increased from 16% for Q1 15 to 26% for Q1 16. Shareholders’ equity was up by 3% to €31.8bn at the end of March 2016 compared to the end of 2015. The return on equity was therefore 5.6% for Q1 16 compared to 9.7% for Q1 15.
N+1 Singer - Uncovered Gems - Speed Dating Lunch - A Famous Five for the future?
12 Apr 17
On Friday we hosted our third “speed dating” lunch with the management of five very interesting and contrasting companies not under our formal coverage: Be Heard, Byotrol, Gfinity, Oxehealth and Plant Impact. Each company gave a concise and punchy overview of its business and investment case to a group of fund managers, before rapid fire Q&A. Below we summarise our thoughts on each company with more details inside the note, plus some relevant slides. We believe that all five companies are well-managed and well worth a closer look - we intend to repeat this efficient and popular format for engaging with management teams.
24 Apr 17
Lok’nStore* (LOK): Growth supported by a strong balance sheet (CORP) | Mortice* (MORT): UK acquisition (CORP) | Avacta* (AVCT): Another milestone – 1st non-therapeutics licence (CORP) | Petra Diamonds (PDF): Trading update and Q3 results (BUY) | Nasstar* (NASA): Growth and margin focus (CORP)
Non Life Insurance - Growing impact of hacks on share prices
18 Apr 17
Our November 2016 Cyber report flagged the growing impact of cyber attacks on quoted companies, noting that Yahoo’s breach would inevitably negatively impact Verizon’s offer price, which it did. A report by CGI and Oxford Economics has found that, to date,severe hacks on UK companies permanently reduced their share price by 1.8% - or approximately a £120m hit to MCap for a FTSE 100 firm. With GDPR coming into effect next year, we expect more headlines. That has got to be good for cyber insurers and cyber security firms.
Small Cap Breakfast
24 Apr 17
Global Ports Holding—Intention to float on Standard List of the Main Market. International cruise ports operator. Seeking $250m raise including $75m primary offer. Dorcaster—Schedule One Update. Admission now expected on AIM 3 May. RTO of Escape Hunt raising £14m at 135p. Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May. Eddie Stobart Logistics— Schedule 1 update. Admission expected 25 April on AIM raising £122m. ADES International Holding— Intends to join the Standard List of the Main Market in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May. Tufton Oceanic Assets– Offer extended to 9 May on specialist funds segment of Main Market to enable investors to complete further due diligence.
N+1 Singer - Small-cap quantitative research - Growth style screen revamp and 10 focus stocks
06 Apr 17
We have reviewed the performance of our consistent growth screen since the previous refresh on 27 September 2016 and revamped the selection parameters to focus more on forecast sales and EPS growth going forward. In the period under review the consistent growth style screen outperformed the small-cap benchmark by c. 6% and underperformed the microcap index by a similar amount. Interestingly, although growth doesn’t always seem to be defensive as might be expected, however it appears right to buy growth on dips caused by or coincident with wider market volatility. In the new forecast growth screen we take a close look at 10 focus stocks. We will monitor performance and refresh it in three to four months time.