Alm. Brand Group's Vision for 2025
This announcement outlines Alm. Brand Group’s profit expectations for 2025 and reviews the financial achievements for 2024. The interim report for the fourth quarter of 2024 is due to be released on February 5, 2025, providing more insights into the group’s performance.
2025 Financial Performance Expectations
Alm. Brand Group is optimistic about continuing its upward trajectory into 2025. The company anticipates reporting an insurance service result ranging from DKK 1.5 to DKK 1.7 billion, excluding any run-off gains or losses, thus maintaining its commitment to ambitious profitability plans set in previous years. The forecasted profit incorporates benefits expected from synergies amounting to DKK 600 million.
A significant part of the profit growth is attributed to enhanced profitability in both Personal and Commercial Lines, achieved through a series of strategic initiatives aimed at boosting profit margins. The projected expense ratio for 2025 stands at approximately 17%, while the combined ratio, excluding run-offs, is estimated to be within the range of 85.5% to 87.5%.
Target Metrics for 2025
Despite various economic challenges, including a decline in interest rates and rising motor claims, the company’s primary targets remain intact. Alm. Brand Group aims for an insurance service result—including run-offs—of DKK 1.85 billion, alongside a combined ratio of 84.5%. These objectives reflect a long-term average of about 2% of premium income attributed to run-off activities.
Additionally, the investment result is expected to reach around DKK 200 million, driven by returns not specifically allocated to hedging provisions. Conversely, other operational activities are anticipated to incur a loss of approximately DKK 125 million.
Projected Pre-tax Profit for 2025
For the upcoming year, Alm. Brand Group projects a consolidated pre-tax profit between DKK 1.58 and DKK 1.78 billion, excluding special expenses required for ongoing integration plans stemming from the acquisition of Codan and adjustments in divested operations. Special costs connected with these processes are expected to total about DKK 175 million, with a specific allocation of DKK 25 million for the separation of the divested entities. The company also anticipates recognizing around DKK 335 million related to the amortization of intangible assets.
Insights on 2024 Achievements
In 2024, Alm. Brand Group’s ongoing operations achieved significant milestones, realizing insurance revenues of DKK 11.1 billion. The insurance service result amounted to DKK 1.44 billion, which included gains from run-offs, leading to a combined ratio of about 87.0. Despite facing challenges, such as motor claim expenses, the overall results were viewed as satisfactory and indicative of positive trends leading into 2025.
Distribution Plans for 2025
The Board of Directors has proposed an ordinary dividend of DKK 0.60 per share based on the 2024 financial year performance. Alongside a completed share buyback program valued at DKK 150 million, the group plans to initiate a new DKK 100 million buyback program, suggesting a total adjusted payout ratio of 96% for 2024.
Anticipated distributions related to the divestment of the Energy & Marine segment total DKK 1.6 billion, structured into an immediate share buyback plan post-transaction closure, lasting up to one year. Alm. Brand Group envisions a total distribution of DKK 2.6 billion during 2025.
Support from Key Stakeholders
Alm. Brand Group has secured indications from its majority shareholder, Foreningen Alm. Brand af 1792 fmba, expressing intentions to proportionately participate in the share buyback activities. Currently, this entity controls 47.8% of Alm. Brand A/S shares, taking into account shares already intended for cancellation.
Leadership Statements
Rasmus Werner Nielsen, the CEO, remarked, "In 2024, we supported a large number of customers with their motor-related claims and claims arising from increased travel activities. It is gratifying to conclude the year with a satisfactory insurance service result, enabling us to build a robust foundation for 2025. We are on track to meet our long-term goals for Codan's integration despite complications from interest rates and a heightened number of motor claims since our merger in 2022."
Frequently Asked Questions
What is Alm. Brand Group's projected insurance service result for 2025?
Alm. Brand Group expects an insurance service result of DKK 1.5 to 1.7 billion for 2025, excluding run-off gains.
What factors contributed to Alm. Brand's 2024 financial results?
A combination of strong insurance revenues and effective cost management led to a profit of DKK 1.75 billion before taxes in 2024.
What is the proposed dividend for the 2024 financial year?
The Board recommends an ordinary dividend of DKK 0.60 per share for the 2024 financial year.
How does Alm. Brand plan to handle share buybacks in 2025?
Alm. Brand plans to initiate a DKK 100 million share buyback program, complementing previous buybacks totaling DKK 150 million, aiming for a total distribution of DKK 2.6 billion.
What challenges does Alm. Brand foresee for 2025?
The company anticipates challenges such as a lower interest rate environment and increased motor claims, but remains committed to achieving its profit targets.
