Good day, and thank you for standing by. Welcome to the Aegon's First Half 2025 Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thanks, operator, and good morning, everyone. Thank you for joining us for this conference call on Aegon's first half year 2025 results. I'm Yves Cormier, Head of Investor Relations, and joining me today to take you through our progress are Aegon CEO, Lard Friese; and CFO, Duncan Russell. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. And with that, I would like to give the floor to Lard.

Thank you, Yves, and good morning, everyone. I want to start today's presentation by informing you about the next steps in Aegon's transformation and running through our commercial developments before Duncan will address our results in more detail. So let me begin on Slide #2 with the key messages. Our strategy is to grow and transform our businesses, and we made good progress in doing so during the first half of 2025. We are on track to deliver on our strategy and on all our targets. Our operating result was EUR 845 million, up 19% compared with last year. This increase was mainly driven by profitable business growth and less unfavorable claims experience in the U.S., but also in the U.K. and in our International segment. Operating capital generation before holding and funding expenses amounted to EUR 576 million, decreasing by 2% over the same period. New business strain increased, especially in our U.S. strategic assets as we grew the business. Commercial momentum remains strong across our key markets leading to higher new life sales and more net deposits. The capital position of our operating units remains strong and above their respective operating levels. Furthermore, in the U.S., we have extended the hedging of the variable annuity portfolio to cover part of the base fee exposure, which reduces our exposure to downward equity markets further. Cash capital holding totals over EUR 2 billion following the receipt of planned remittances from all our units and the completion of a EUR 150 million share buyback in the first half of the year. On the back of the solid performance, we have increased the interim dividend by EUR 0.03 compared with last year to EUR 0.19 per common share. Furthermore, today, we announced a EUR 200 million increase to the current share buyback…

Thank you, Lard. Let me start with an overview on Slide 7. In the first half of 2025, the operating results increased by 19% year-on- year mostly reflecting an improvement at Transamerica. Operating capital generation before holding, funding and operating expenses decreased by 2% over the same period, mainly driven by higher new business strength. Free cash flow in the first half of 2025 amounted to EUR 442 million, and this is a significant increase compared to the EUR 373 million generated last year. Cash capital at holding remains very healthy, standing at EUR 2 billion for the end of June, allowing us to announce an increase of our ongoing share buyback program. On a per share basis, valuation equity, which consists of the sum of shareholders' equity and the CSM balance after tax decreased by 5% in the period, mostly from the impact of unfavorable exchange rate movements on the group CSM, which were partly offset by a strong net result. Exchange rate movements were also the driver for the reduction of gross financial leverage. And lastly, the group solvency ratio decreased by 5 percentage points compared with year-end 2024 to 183%, mainly from the new share buyback program and the reservation of the 2025 interim dividend. Using Slide 8, I will address the development of our IFRS net results in the first half of 2025. The operating results amounted to EUR 845 million coming in at the top end of the EUR 750 million to EUR 850 million run rate range we had indicated with the full year 2024 results. In the U.S., the operating results improved materially year-on-year to EUR 685 million within our guided range of EUR 650 million to EUR 750 million. The result benefited from growth in our strategic assets, notably the Protection Solutions…

[Operator Instructions] And your first question today comes from the line of David Barma, Bank of America.

To start with, can you talk about what drove the decision to cover 25% of the variable annuity based fee, please? Did you see that as the optimal balance between cost of protection? Or is it a first step and you'd like to do more over time? And I'll ask my second straight away because it's linked to that. The -- that combined with the measures taken on the Universal Life block will weigh on OCG going forward, but you've reiterated the guidance. We've been in a similar situation in the past 2 years with mortality first and then the drag in China, both being offset by other measures. So as I'm trying to understand how reliant OCG is to the current level of equities and to what extent stronger-than-expected business growth is making you comfortable with the OCG level that you're guiding for? If you can give a bit of color on that, please?

Thanks, David. Yes. Okay. So the VA based fee hedging, David, we executed upon that in recent days, actually last week, we executed upon it. And that is an additional tool we brought into our toolkit to manage and stabilize the capital generation and the earnings profile of our legacy variable annuity book, which is in runoff, as you know. We did that for a number of reasons, partly to stabilize capital, partly to bring an additional tool kit, partly because equity markets are at a good level. So it's just part of a normal ongoing management unilateral actions related to financial assets. The 25% again, it's a bit -- probably a bit of prudence on our side. We wanted to execute upon that, monitor how it works to make sure you understand it fully. And then in the future, once we fully have observed that we could increase it or decrease it depending on how we view things. So one thing, we do have to balance and manage when we do these things is the impact of flooring on our capital position. So that is one thing, which we continue to monitor. But the net-net, it's reduced our underlying economic equity exposure on that VA book, which I think is a good thing. In terms of OCG, actually, it's a fairly clean quarter. We've reiterated our guidance. If I take the actual reported OCG for the half year, add in our quarterly run rate, then we're still getting into our guided range of around EUR 1.2 billion for the year. Your comments on our equity sensitivity, actually, we're not particularly equity sensitive. You can see the sensitivities in our balance sheet, which are not particularly large. And we -- I think we've guided that our OCG is sensitive by plus or minus 10% to around USD 40 million. So again, not particularly equity sensitive to be honest.

Your next question comes from the line of Michael Huttner from Berenberg.

I wanted to say it's almost like -- sounds like goodbye, the decision to -- and I take it as a decision if you've already started doing U.S. GAAP, it sounds to me like a decision. So first question on the U.S. GAAP, can you -- as an indication, where will it land roughly relative to the operating profit or the OCG we've got already? And the other two, I know that it's more than two questions. The pooled plan, how big it is? Because I guess it's around EUR 2 billion, but I don't know. And then also the figures on the new business strain. If I may, the economic exposure, the VA benefit, how much does it reduce the capital required?

Okay. Michael, that's a number of questions. Let me confirm, it's EUR 1.9 billion the pooled plan that you're referring to as part of the retirement growth of net deposits in this half year. For the remainder, I hand over to you, Duncan.

Yes. So Michael, the -- on U.S. GAAP, no, it's too early to tell. And I don't want to give any sort of guidance on that, that would be misleading at this stage, to be honest. Then on the capital requirement from the VA, it's a small capital benefit. We are reducing the equity exposure, which will reduce the required capital by a small amount in the third quarter.

And the new business strain?

I'm not entirely sure what your question was on new business strain. But if I look in the quarter, our new business strain was more or less as we anticipated, it was roughly EUR 6 million higher than our guided run rate in aggregate.

And the next question comes from the line of Farooq Hanif from JPMorgan.

I just want to delve a little bit into your thinking on the redomiciliation because you've told us, obviously, that you've considered this in the past or it's been on the table, particularly when you move to your regulatory domicile to Bermuda. So I mean, I get the point about it makes sense from the point of view of most of your business is obviously from the U.S. But I just want to understand what's changed given that you -- I believe that you've probably looked at this before. So I mean, the things that come to my mind are regulators, does it also make it easier for you to execute on some of your plans in the U.S.? Would that be a factor that, for example, in terms of being able to use U.S. GAAP and just being located there. I wonder if you've been willing to just talk a little bit more about this, I mean, I realize you're reviewing it all, but just some of the other factors that are important. And then -- sorry, that was a very long question. Second question, how clean is your EUR 845 million operating profit? Can you -- I mean you did quickly run, Duncan, run through some points, but how clean do you think it is?

Yes. So Farooq, I will answer your first question and take it through the rationale and everything that you asked for. And then -- but let's start to clear the questions to Duncan on the financials, the second one.

Yes, Farooq, it's pretty clean. So we are happy with the first half IFRS operating profit. We reported EUR 845 million as you mentioned. And if I -- there were still some negative variances. If we add back all those negative variances, which is roughly EUR 92 million for the group, we get to an adjusted number of around EUR 937 million, which is strong. . Having said that, as we flagged at the full year, we do have a recurring VA interest accretion, which we deduct, let's say, EUR 30 million to EUR 35 million. So underlying around EUR 900 million in the first half. Since then FX has weakened. And hence, we're coming back into around the EUR 850 million level, which is in the guided range. So a pretty good quarter, a pretty good half year, Farooq, to be honest.

So Farooq, on the rationale and everything related to what you asked on the potential move to the U.S. A couple of things here. So the Aegon transformation, as we all know, is pretty profound, and we've done quite a number of steps over the last years to be where we are today. And we are now ready for this next step in the transformation. At the time that we were announcing the combination of our Dutch business with ASR and then the subsequent closing of that in July -- at the beginning of July of 2023. We should all go back to that moment because it was in a very important moment. At that point in time, we were in the middle of implementing IFRS 17 -- had just implemented IFRS 17, and we were in the middle of disclosing it for the first time. That's number one. So at that point in time, there was not U.S. GAAP available at all. That's number one. Number two, we were closing the transaction with ASR, which is a very comprehensive transaction. We needed to make sure that we embedded the group after that appropriately operationally. We also moved as DNB could no longer be, had no legal basis any longer to maintain to be our group regulator. We moved our legal seat to Bermuda. And then subsequently, the BMA became our regulator, and we wanted to embed everything appropriately. And let's also not forget that in that same period because we closed the transaction on the 4th of July. But in June, that's a couple of weeks earlier, 2 weeks earlier, we had a Capital Markets Day in London where Transamerica was launching its strategy and its plan. And now we have 2 years behind us, and we can see…

So just -- I'm really sorry to jump in, and I'm taking time, but has there been any regulatory pressure to do this?

No.

Your next question comes from the line of Iain Pearce from Exane BNP Paribas.

They're all around the redomiciliation. First, if you could just touch on what you think the main challenges will be of potentially redomiciling obviously, you flagged U.S. GAAP, but just sort of what you think the main challenges of the move would be? And have you had any conversations with your main shareholder about this move? I mean clearly, that article of association might cause some problems for them with a redomiciliation potentially. And then the second one is just around the asset allocation opportunities of redomiciling and moving to a U.S. regulated entity. Do you see that one of the main benefits of -- and is the plan to really re-risk the asset portfolio in the U.S. and increased private asset allocations as part of this redomiciliation?

Thank you very much Iain. I'll take the first couple of questions. And on your last question, I'll hand it over to Duncan. So if you look at the key challenges. So first of all, let's clear the anything with association Aegon. We cannot speak for them, obviously. They are informed, and we cannot speak for them. But they are informed to and we'll continue to engage with them obviously in the coming period. When it comes to the main challenges, well, we expect this move -- head office processes in the U.S. We need to build down head office processes here, and we need to make sure that we do that well. U.S. GAAP is a key gating item. The -- we started with it, but the project has started, but it's implementing a new accounting standard. It's going to take some time. And that is a key thing to make sure we do right. And of course, in the meantime, we need to make sure that this transition process is appropriately change, managed and those, I would say, are the key things to mention here. When it comes to the asset allocation opportunity potentially of the -- Duncan?

Yes. I think no impact on the redomiciliation on our allocation choices or opportunity. We manage our entities on a local capital basis. So we're already operating under the U.S. statutory regime for Transamerica, and we have asset allocation appropriate to our liabilities in that market, and I see no impact from the redomiciliation.

And the next question comes from the line of Nasib Ahmed, UBS.

So first one on just M&A. You've still got the financial assets. There's been a big variable annuity deal where I think the counterparty managed to get over the line on the counterparty risk, and that was one of the blockers for you guys, I think. So any thoughts on kind of third-party actions on the EUR 3.3 billion locked in? And then on the flip side anything that you would potentially buy? And how does the U.S. redomiciliation help with M&A on the acquisition side? Second one is on OCG versus IFRS in the U.S. So Duncan, you raised the guide on the IFRS by EUR 50 million, but I think the OCG guide stays the same. What's the difference? Why haven't you raised the OCG guide in the U.S.?

Yes. So I'll take the M&A side and then you can do financial asset, Duncan on the piece about the OCG. So on acquisitions, same as we mentioned before, it's very much linked to our strategy. We want to grow like anybody -- like any company wants to grow. So if we see an opportunity that makes sense and it strengthens our business and it makes sense both for financial criteria and nonfinancial criteria, then we will certainly look at it. We will be disciplined. We're not going to do any M&A unless we believe that we can integrate it and that we will create value for our stockholders. Now the U.S. is a large market, it is our largest market. So being there physically with your head office, of course, and being closer to that market on a daily basis, obviously, would be positioning yourself more beneficial for that. But our M&A approach has not changed to what we mentioned before. Duncan?

Two separate questions. On the financial assets, we continue to look at our unilateral, bilateral and third-party options on those books of businesses. We've been doing that for years. And should the transaction presents itself, which we find attractive for our shareholders, if they make sense, we'll do it. If not, we won't and we'll focus on unilateral or bilateral options. So no real change there. We just continue to look at all our options as we have been doing for the last couple of years. On the guidance, well, 2 things. Partly, the guidance reflects what we actually see in our actuals on a clean basis in the half year. So we saw -- we've seen that the U.S. operating profit performed well in the first half under IFRS, and that reflects, therefore, in the raised guidance, which means we expect that run rate to continue and on OCG, where we performed more in line with our previous guidance. And hence, that's driven the unchanged outlook there. Bear in mind, there are quite material differences in the way, for example, growth is treated under 2 regimes. So in the U.S. regulatory regime as you grow into a new business strain, which is pressing in the near term. Under IFRS, you create CSM, which come through in earnings relatively quickly. So that is also an explanation, if you really didn't catch it.

Your next question comes from the line of Farquhar Murray from Autonomous.

A couple of questions from my side, just mainly on the domiciling discussion. Obviously, it's been debated for a few years and does not seem a bit of a foregone conclusion, but I just wondered if you have a sense, therefore, on the actual like project costs of the U.S. GAAP implementation. And then obviously getting closer to the U.S. business makes a lot of sense, but I just wondered where that leaves your approach on the rest of the global footprint.

Yes. So first of all, the costs are going to be part of the review, and we'll update you on the, let's say, on the outcome of the review at the Capital Markets Day. When it comes to the total footprint, well, as you know, we've set ourselves a perimeter in 2020 when I joined the company. We're now in that perimeter, and we have a strategy to improve and to create advantage business in that perimeter. And that is unchanged.

Your next question comes from the line of Benoit Petrarque from Kepler Cheuvreux.

So yes, the first one is actually on your ASR stake. What is your initial thoughts around your stake also going forward, looking at the potential relocation in the U.S. It sounds like it becomes less core than before. And then maybe on ahead of the potential relocation, do you plan to initiate deleveraging actions and yielding holding levels. So any plans to maybe refocus more on deleveraging next year?

Duncan, can you take those questions?

Yes, nothing changes on either of those fronts. So again, today, we announced a review, we'll conclude on that review with the Capital Markets Day. And if we decide to proceed it will take 2 to 3 years, the leverage, no need to change our leverage given our footprint is what it is today. And on ASR, we've been consistent that we're a long-term patient holder. And there are 2 potential reasons we would dispose of that, either we have an alternative lease for that or we feel that the price reflect the intrinsic value. No change on either based on the announcement today.

Your next question comes from the line of Jason Kalamboussis from ING. Jason, it looks like we've lost your connection. Can you hear us?

My suggestion, operator, is you move to the next question, and then if Jason comes back, we'll take his question, obviously.

I will now go to the next question. And your next question is a follow-up from Michael Huttner from Berenberg.

On U.S. mortality Slide 17, can you talk a little bit about the unfavorable claims experience. I remember a figure, I think it was EUR 66 million in Q1. So normally, you would have EUR 33 million because of normal seasonality and there was EUR 33 million on top. I just want to get a feel, it's for which way it's going versus your assumptions? And the second question is, I mean, sorry, Lard, I didn't hear the answer on pooled. I did the numbers. So on the savings and investment Q2 2025, you had a EUR 2 billion net inflow. It was 0 in Q2 2024, and you mentioned pooled plan. And I'm really sorry, I didn't hear the number on that.

EUR 1.9 billion. The pooled plan, you guessed it was EUR 2 billion. You're pretty close. It was EUR 1.9 million. And for your other question, I will hand it over.

Michael, we had the overall mortality in the U.S. in the second quarter was slightly positive. I would say more or less in line with our best estimate expectation slightly positive. So since the mortality update we did last year, we had positive 3Q, 4Q, negative 1Q, positive 2Q this year, and we remain comfortable with our overall mortality assumptions.

We have no further questions at this time. I would now like to hand the call back over to Yves Cormier for closing remarks.

Thank you very much, Jerry, before I hand over to Yves. We will make sure we reach out to Jason Kalamboussis for his question.

All right. Well, thank you, operator. So this conclude today's Q&A session. Should you have any remaining questions, please get in touch with us at the Investor Relations team. And on behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.