AXA’s 2023 Earnings Miss Forecasts on Higher Costs, Lifts Dividend 16% *Centurion Insurance AFS*

France’s AXA, Europe’s second-biggest insurer, reported slightly lower-than-expected yearly earnings on Thursday, as higher debt servicing costs and investments in tech ate into a rise in revenues.

The group, which also pledged bigger shareholder payouts as part of a new three-year strategic plan that it is set to unveil on Thursday, said full-year 2023 underlying earnings rose by 5% from a year earlier to 7.6 billion euros ($8.22 billion). That was in line with AXA’s own guidance, but below the 7.69 billion-euro analyst consensus compiled by the company.

Gross premiums and other revenues over the period rose 1% to 102.7 billion euros, also missing the 103 billion-euro analyst average estimate, hit by the removal of two global clients in France and lower sales at its asset management arm.

AXA’s solvency II ratio – a measure of insurers’ capital strength under European Union rules – stood at 227%, up 12 percentage points from a year earlier, the Paris-based firm said in a statement, driven by strong operating returns.

“(The lower-than-expected earnings) mainly stem from two reasons: our debt which is a little more expensive because of the rise in rates and secondly the fact that we have increased investments in technology,” Chief Financial Officer Alban de Mailly Nesle told reporters in a call.

The group, led by Thomas Buberl since 2016, also announced what it called a “capital management policy” as part of its new strategic plan. It promises to pay shareholders up to 75% of earnings in cash, including a dividend payout ratio of 60%.

The new policy translates into a yearly dividend for 2023 of 1.98 euro per share, up 16% from 2022.

In total, AXA will return up to 6 billion euros to shareholders in 2024, divided between 4.4 billion euros in dividends and up to 1.6 billion euros in share buybacks.

The dividend payout policy under AXA’s previous three-year plan was in the range between 55 and 65%.

($1 = 0.9249 euros)

(Reporting by Mathieu Rosemain; editing by Tommy Reggiori Wilkes)

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