H1 2022 earnings call transcript
Our analyst
Read of this earnings call — headline is the investment verdict. Research synthesis, not investment advice.
AXA delivered a solid HY22:
revenue reached €55bn, up 1%, health grew 13%, and underlying earnings rose 4% to €3.9bn, with solvency described as comfortably above target. Rising rates should support savings economics, but the transcript offers no quantified second-half outlook and leaves macro, geopolitical, and climate-related claims uncertainty unresolved; the evidence supports a hold rather than a clean buy.
- Hy22 Results
- Health Growth
- Rising Interest Rates
- Solvency
- Digital Commercial Platform
- Climate Risk
- Driving Progress 2023
Near term
- Rising interest rates could improve savings and investment economics, while also increasing market volatility.
- Execution of the Driving Progress 2023 strategy remains the main company-specific catalyst.
- Climate-related claims activity and broader macroeconomic deterioration could pressure underwriting results in the second half.
Longer term
- Health growth and the Digital Health and Digital Commercial platforms could support recurring growth and customer retention.
- AXA’s strong solvency position provides resilience and capacity to invest through uncertain markets.
- The long-term earnings impact of climate change remains a structural risk unless pricing and risk prevention keep pace with claims inflation and event frequency.
Red flags
- Management provided no quantified second-half or full-year earnings, revenue, margin, or solvency guidance.
- The claim that the strategy is well adapted to the environment was not supported with measurable targets or sensitivity analysis.
- Geopolitical, macroeconomic, and climate-related risks were acknowledged but not quantified.
HY22 – Thomas Buberl Video Transcript
How did the first half of 2022 go for AXA?
- This first half of the year has been marked by high geopolitical tensions. For several months now, we have been witnessing the violence of the war in Ukraine. I would like once again to express my solidarity and that of AXA employees with the victims of this war.
- These tensions have an impact on the macro-economic context, which is particularly uncertain today.
- In this difficult environment, AXA's employees and agents have continued to demonstrate an impressive commitment to serving our clients. Thanks to them, AXA has performed well.
What can we take-away from this performance?
3 indicators show this good performance.
- Revenues reached Euro 55 billion, up 1%. Above all, important segments have experienced strong growth, especially health: +13%.
- Profitability was also on target. Underlying earnings increased by 4% to Euro 3.9 billion. This strong result was driven by our two major markets, France and Europe. AXA XL also confirmed its ability to generate good results.
- Lastly, the Group's financial solidity is at a very high level. The Solvency II ratio is far above our target.
What are the highlights of this semester?
I would like to highlight three important events for our customers.
- Firstly, we have continued our ambition in innovation by launching the Digital Commercial
Platform. This will allow us to bring more services and prevention offers to our customers. It is the second ecosystem of innovative services that we want to offer our customers, after the
Digital Health Platform which continues to develop in several of the Group's markets.
- Secondly, interest rates have started to rise after being low for more than 10 years. This is very good news for our customers' savings.
- Thirdly, we have seen that the consequences of climate change are increasingly impacting our daily lives. We have been there to help our customers affected by climate events. We have also continued to reduce our impact on the planet. But we all need to accelerate on this issue.
What are the challenges for the second half of the year?
The macroeconomic environment is uncertain.
- We must continue to implement our Driving Progress 2023 strategy, relying on the Group's very strong financial solidity.
- I am confident because we have fully committed teams and a strategy that is perfectly adapted to the environment.