AXA S.A.

Andrew Wallace Barnett - IR Thomas Buberl - Group CEO Gerald Harlin - Group CFO George Stansfield - Group Counsel

Jon Hocking - Morgan Stanley Paul De'Ath - RBC Nick Holmes - Society General Farooq Hanif - Credit Suisse Andy Hughes - Macquarie Michael Huttner - JPMorgan Andy Sinclair - Bank of America-Merrill Lynch Kevin Kelly - UBS John Woo - Goldman Sachs Andrew Crean - Autonomous Oliver Steel - Deutsche Bank

Thank you very much. Good morning everyone and welcome to the AXA conference call on our activity indicated for the first quarter of 2017.

You will have noted that we made three additional announcements this morning and obviously we would like to take the opportunity of this call to address all four topics. I'm pleased to welcome here to the call Thomas Buberl, our Group CEO; Gerald Harlin, our Group CFO and George Stansfield, our Group Counsel to the call and I propose that we handle the call in three parts.

Gerald will give you initially a quick overview of the main figures in the 1Q activity indicators press release and overview of the share buyback announcement that we made this morning. And following that Thomas will of course discuss the announcement of our intention to make a minority listing IPO of our US operations and the new MC appointment we announced this morning.

And then of course we will open the floor to questions-and-answers. We'll try to be as brief as we can in the introduction and as quick as we can so that we can have maximum time for your questions.

And Gerald I hand over to you.

Hello, good morning to all and thank you Andrew. Let's discuss with some key highlights for the first quarter before moving to the sequence announcements.

In the first quarter we saw volume growth in our preferred segments. In Life and Savings APE growth was 4% on basis and 1% on a comparable basis, with growth across most of the product line.

Protection and Health APE was up 3%, with strong sales in Hong Kong, in France and Japan. Unique needs APE was 5%, driven by higher new business in the US and in France.

GA savings APE declined, was mainly explained by lower sales at AXA MPS in Hong Kong and reduced sales in Japan following the rigid acquisitions in Q4 2016. MBB margin was at 1 point to 69% reflecting an improved new business mix especially in China.

This along with the growth in APE led to an NBV growth of 4%, with floating in Southeast Asia, India and China, NBV was up 63%. Life and Savings net flows were EUR2.6 billion as net flows in our preferred Protection and Health, Unit Linked and G/A Capital light segments we have up yield set, by out flows, the traditional G/A in line with our strategy.

In P&C due to the revenues, we are up 2% mainly driven by our priority commercial line segment which grew by 3% from volume as well as price effect. It is important to note that both in commercial lines and personal lines, the amount of portfolio grew by 3%.

I would also like to highlight that the Health revenues were up 7% for the quarter. Asset management now, asset management's net inflows improved at AXA IM and AB in the retail channel and more than compensated the outflows from the traditional channel mostly driven by a loss of large mandate at each.

Revenues for asset management business were up 7% due to higher average assets under management as well as improved management fee basis points reflecting improved business mix in general. Solvency II ratio was at 196%, down 1 point from year-end 2016 as the impact of net subordinated debt reduction in the quarter was mostly offset by the positive contribution from the operating return net of estimated dividend accrual.

In the first quarter of 2017 we saw good performance priority business segments as communicated in our Ambition 2020 plan. Now, moving on to the second sector [indiscernible], we also announced this morning a buyback of AXA shares to meet our obligation to deliver shares and to eliminate of the dilutive effect of certain share-based compensation schemes namely stock options and perpetual shares plan.

Previously on an annual basis we bought back shares each year through eliminate the expected dilution impact of certain share-based compensation schemes during that specific year. It's a 77 million maximum net to shares to be brought back the end of 2017, mentioned in today's press release.

However, it's based on the maximum number of shares expected to be delivered or issued not only in the current year, but also in the future years under certain share-based compensation schemes already granted. We believe that given market conditions are appropriate for us to accelerate our buyback program and it is a reflection of the continued strength of our balance sheet and cash initiatives.

I would like to now hand over to Thomas who will talk to you about surplus release this morning.

Thank you, Gerald and good morning to all of you. I would like to draw your attention to the third press release as we have announced our intention to IPO a minority stake of AXAs US operation.

This part is extremely a key discussion and strategic discussion because it creates additional flexibility on the financial side to accelerate our transformation in line with the Ambition 2020 objective that we have published last year in June. We see this transaction to be a benefiter of both AXA group and to the entity of AXA in the US.

Towards AXA group, it is clearly a lever to generate additional financial flexibility which enables us then to invest into our priority market segments that we have reviewed in the context of Ambition 2020, which are Health and Protection and the commercial line P&C business and at the same time it produces our exposure to finance progress. For the US entity, we also see clear benefits, one being an improved competitive positioning of the US in its local market.

As you know we are not present in some lines of business that our competitors are present in, which means that there is a stronger growth prospects for this US entity particularly as the entity would then benefit. Another benefit for the US operation is clearly in combination with the asset managed AllianceBernstein where we are a majority shareholder is that we have an opportunity to gear up with AB to be really a leading financial services provider in the US.

Why do we believe the right timing is now, we obviously have transformed the US entity of AXA significantly in the last year towards new generation of products and towards a very strong distribution platform and I would really like to congratulate the team that has done an excellent job in really getting up to where we are today. When we look at the markets, when we look at the interest rates and the natural conditions, we truly believe that there is a window of opportunity to really go to the next step given also the effect that we see regulatory diversions between the US and Europe and we really want to take care of this to make sure that the entity is better positioned.

When we look at AXA US today as an entity, it is clearly the leading franchise in the variable annuity space and particularly the modern and new variable annuity space, but also in the life insurance and employee sponsor. So I want to remind you that certainly in some areas of the employee sponsor has [indiscernible] our business and we are a very, very successful player.

The second most important thing is that if you look at the proposition of the US entity, it is a unique combination of VA where annuity ends life and health proposition and that's a very successful asset managed by AllianceBernstein plus a very successful distribution platform AXA has behind this. It is important that going forward we continue the direction we have taken in terms of business mix shifts towards those new VA products, but we continue the steady discipline in terms of our product developments, hedging and the reserving ends that we really continue and a strong delivery on earnings and cash generation that we have shown in the recent years.

This move will have no impacts on the Ambition 2020 targets on the company. We reaffirm out 2020 target which is our underlying earnings per share will grow between 3% and 7% depending on the market conditions as we have shown you last year in June.

We will remain with a very strong balance sheet that we're very proud of and the Solvency II ration in the range of 170% to 230%. We are committed to the cumulative cash from assets to the group holdings again between 24 billion and 27 billion over the trial period ends.

We will also remain committed to an adjusted return on equity of 12% to 14%. I would like to remind you again that both of results of 2016 concludes a very successful first chapter where we have reached all of these targets and when you look at what Gerald has presented in terms of activity indicators, it is very much in line of the selective roles and the shift towards the priority lines of business.

I would now like to come to the fourth announcement that we have issued today and I'm very delighted to announce the appointment of Joyce Phillips. Joyce Phillips will be a member of the Management Committee and the CEO of the lines that are dedicated to customer innovation and new business models.

So he would also reflect that he's really focusing on making the transform part of Ambition 2020 reality. We have clear views and decisions on in which areas we want to realize those business models.

All in all I would like to put these four announcements again into perspective because they have a logical sequence and collision. We have launched Ambition 2020 last year and we are fully committed to this and you've seen growth in the 2016 result and in the Q1 of this year that we are fully aligned with it, we are fully committed and we are well underway to make this happen.

This has given us the confidence to say, look we need to accelerate, we want to do more. Therefore, we have decided to IPO our US operations to grow further in question on focus and transform, liberate or reduce our exposure to financial risk and hence the initiative means to shift our portfolio towards protection and health and the commercial P&C.

In addition to that, we are cruising further the transformation, are now appointing a separate member of the Management Committee fully responsible for developing these new businesses. I would like now to hand over back to Andrew.

Thank you very much Thomas and Gerald. We would be happy now to take your questions.

Good morning everybody. Three questions please.

Just firstly on the comments about financial flexibility, I think most of it has felt the grey pad a little financial flexibility already. I just wonder if you could comment a little bit on specifically what additional price point gives for grey, but for presumably you reduced your reliance on the equivalence calculation in the US, since company loan et cetera, et cetera is the first question.

Secondly, accelerating the new strategies of the health insurance, commercial loans et cetera, could you talk a little bit about what that might be said, are we talking about built on here, accelerated development of IT platforms is specifically - what will additional capital do in terms of the ability to accelerate the strategy. And then just wondering if you could give any comments in terms of the potential mix between sort of return of capital reinvestment which that field is going to release that's actually the emphasis there's more reinvestment rather than return of any prices.

Thanks very much.

Thank you very much Jon for your questions. I would suggest that Gerald take your third question and I'll give you a flavor account for the first two questions because I believe they're very much related.

You're absolutely right in saying that we do today have financial flexibility, certainly also given our very strong balance sheet, we have taken a very clear commitment to move our business mix and portfolio mix more towards health, more towards commercial and P&C and this goes very much in line with what we said a couple of months ago. We want to do this obviously and to focus our M&A efforts on these topics.

We want to position ourselves into the range of M&A and not with very small deals and not with very large deals, but with deals around 1 billion to 3 billion and we have made a very clear segmentation of countries and positions and have a very clear list on where we want to go. So we need those means to really make a shift because by acquiring a 100 million company, this will not move the meter.

Secondly, as you pointed out and that's your second question, we have some very clear targets in moving into new business around the traditional insurance coverage. Why so we believe that this is key, in the transformation of our business it is extremely important to get closer to the end customer.

So they often - the end customer relation is with an agent and we have clearly decided to change our perception of the end customer relationship more towards AXA holding the end customer relationship with the agent playing a very important role in this end customer relationship. Today, when you look, we're serving 20% of our customers heavily where we pay credits, 80% of our customers do get credits from us but don't receive a claim settlement and I personally wouldn't want to change it, but we need to redefine the value proposition for these customers.

So when we look at these customers, those customers want something from us, they want something from us in the area of prevention, they want something from us in the area of cash coordination or how can we help them to find the right medical journey and they want something from us in the area of elderly cap. We have clearly said that we are committed and decided to move into these areas.

We have successfully completed some files in some entities which now of course is rolling out, but we want to go further as well because they're new business models arising both in itemized insurance when it comes to how can we better observe the digital market of e-commerce where it's about insuring a single optic object versus insuring a whole room or whole house or whole car, hence in the area of health, on the populated health management, where we can export and fill our expertise particularly in care coordination and chronic disease management to surpass the forefeet.

Thank you, Thomas. Can I ask you a follow up Thomas, I think a little of your peers have also got strategies to perceive built on M&A, but as you struggle to find sizeable targets and given that you've been very clear that you see the insurance business model as being transformed overtime, is it right to believe that some of the targets for M&A might not be traditional insurance business, they might be businesses of those strength in adjacency how will you execute that business model because presumably you're not going to buy old school insurance businesses for these M&A targets.

No, Jon. You have to revises, I mean there is no interest in buying old school targets.

So when you look at new school targets it is true that in this division - in the insurance business as such it is not an easy space and therefore we try obviously to be smart about getting these deals. As you know our AXA has got great history of doing smart deals and we want to continue that history.

And secondly, you also have to revise that going into so called adjacencies which are around the insurance coverage, but which are highly linked to insurance coverage. That's a space where we don't see many traditional fit.

But I don't want to forget your third question, the question which Gerald should answer.

Yes, Jon. Your question was about the mix of investment.

It's tough to really tell you exactly what will be the mix of investment. Keep in mind that the IPO will take place in H1 next year.

What I can tell you is that beyond this we have the full commitment and our full commitment is to say that we keep our vendor line on each of those [indiscernible] over the frontier years between 3 to 7, which means that we don't only debate and we do everything in order not where the diversion coming from these three assets.

Okay, that's very clear. Thank you very much.

Yeah, thanks and a couple of questions please. Firstly on the US IPO and do you see any impact on the minority shareholders alliance on staying at top of the area that you're looking reshape the look of those businesses when you put them together and that would be the first question.

And then secondly just looking at the cash of the group and the cash for making sense because I see for a while the US Life business has been effectively repaying the company loan, which you're now converting into equity. So should we say this is potentially a delay in cash coming out to the US into when IPO is done and then you place again the cash is coming out going forward so just some thoughts on that would be great.

Thanks.

So I would suggest I would take the first question and then Gerald the second one. On AB and maybe I have to look at it.

We would like to comment on it in a larger context. You have seen that on AB, two weeks ago we announced a management change, those two transactions, so the management change and the IPO are completely separate and we have nothing to do about with each of those.

But it is clear that obviously the combined proposition of the US entity and AB, we believe it's a very interesting and a very compelling proposition and the minority SAP should benefit from this because it's a much bigger perspective for them as well. Behind your question is another question which is how we go into buy out the minorities as next step?

The answer here is clearly no.

Your second question do you expect any delay before the IPO in terms of remittance. No, at least that we reaffirmed our target of 24 billion to 27 billion committed cash flow.

Second, I would say that you should keep in mind that you're not mentioning the fact that we mentioned that we will get July around 1 billion, so we will inject 1 billion of capital which will be for the capitalization of the existing loan the 1 billion. But, keep in as well that the 15% of AB which are not presently held by the US entity will go back to the book and frankly speaking if I take today's stock price of AB, it is in the amount of 1 billion.

So don't consider that this 1 billion should in line forward because we have an upsetting element of 1billion cost for the original 15%.

Hi, there, I had a couple of questions. The first is looking at health insurance, can you share with us which countries do you think you're under weighed in and which would be the top priorities for expansion.

And then second question is with the US IPO, would you be disappointed if you end up returning the sale prices to shareholders rather than investing it in the business. Thank you.

Thank you, Nick. So we'll keep the tradition of this call.

I'll do the first question and Gerald will do the second. On the health insurance, let's talk again with where we are present.

When you look today at AXA and health insurance, we have an operation of about 12 billion growing very nicely. As Gerald pointed out earlier in the Q1 indicator, we have six large positions in six countries ranging from Japan to Hong Kong to some European countries, Germany, UK, France, to Mexico.

When you look at our position on the global level we are - if you take the US entities away which are only in the US, the dominance health insurer globally. There are obviously as you could imagine markets where we believe it makes sense to be developing our business, but those markets have truly been identified, those markets are very much linked to the question, what population growth do you have and what wealth of the population do you have.

And if you just take this and look at where we are present today, it will most likely strike you that there are some Asian countries that are very strong in population, development and in the wealth of their population where we are already in a good position today and we're clear that we want to grow. To be very concrete those are countries like Thailand, like Indonesia, where we have a good position and where we want to grow.

It is also true that if you look in China this business is a business where 60% of the profit pool is being made. There's clearly an intention to grow in this area as well and given our two joint venture positions both with Tianping and ICBC, we're in good position to do it.

But if I go also to the other side of the globe, you have clearly a market where we see a large potential which is Brazil where we are not present yet on the health side. And the big question is also around the US, in the US it is clear that we'll not get into the tactical health space because it is dominated by a very large sector.

But if you go back to what I mentioned to Jon earlier, the new business developing called population health management which is essentially a fee for service business for our traditional provider that is clearly something where I would see ourselves looking at the potential in the US market. Second question for Gerald.

Yes, your second question is would you be disappointed if we would return capital to shareholders. I would say that we manage this company in the best interest of our shareholders.

We consider that returning some capital to the shareholders is the best way in order to keep high level of - to keep the best return for our shareholders. We will do it, so we don't have any pursuit on that side.

But as explained by Thomas, we will do our best in order to invest in our business lines, but I don't believe that there is contradiction between those and we will manage it in the - with our shareholders.

Great, thank you very much. Just a very quick follow up, Thomas, for health insurance is it necessary to make acquisitions or could you do it organically?

No, I think both cups are on the table. If you look at the geographies I've just spoken about, we are looking at all options, I mean in the countries where we are present, it's a question of expanding our existing franchise, but that also needs investment because when we look at the health proposition, we don't only look at - we launch a business that is to say to make it simple pay bills, we see health insurance going further, it is the bill payments but is also the propositions around it which gives the question about, when is end prevention.

We've launched successful proposition in the UK, in the B-2-B sector that is clearly also on the cups when we go into new market and push our business. The second piece is around cash coordination for the question of [indiscernible] and finding the right doctor.

And then the third piece is around chronic disease management where we can really leverage the expertise in the six large markets that I mentioned beforehand into new markets. So both is on the table, I've refused partnership or acquisition.

That's great, thank you very much.

Hi, there, thank you very much. Can I just go back to the question on financial flexibility, could you just tell us what the moving parts are for us to work out what sort of true impact would be of lifting that holding company, since you're lifting AllianceBernstein contributions with equivalent, could you explain how we would work that out.

Secondly, looking at the history of things in the past, it almost inevitably moved to a situation where lift the whole thing, so I was kind of wondering how much you're thinking of lifting initially, but is there inevitably going to be a withdrawal from ownership of the US in the long term. And lastly could you explain why you think lifting the US business [indiscernible].

Thank you.

It was quite a poor noise through. Let me see if I can answer your questions for the people here.

Your first question was on financial flexibility and what the potential Solvency II impact would be linked to equivalence et cetera. The second question you asked was do we have in mind for the sell down to reduce our interest in the US business further over time.

And the third question escaped me.

It was why better growth in the US if you lift?

What we believe that the growth prospects in the US increase with an IPO?

Yeah.

So I think, George why don't you do the first question and then I'll take the second one on the ownership and then the growth one we leave it to Gerald.

So Farooq, your question is an important one because of course the financial flexibility, where will it come from. It will come from the fact that as you know today we're benefiting from the equivalence.

Many times we got the question about what would be - what would be the equivalence and we say, 30, 40, points or something around it. What does it mean?

It means that from pure economical point of view, from a pure economic point of view, the economy capitals that we delivered is quite sizable meaning that with decrease in our share in the US will get more flexibility from an economic point of view. So you understand at the same time that even [indiscernible] which was at 196 at the end of March, some profitability from the equivalence from a pure economic point of view, but a decrease in our exposure to the US is the way for us to delay the billing for the [indiscernible] which is the most dependent on the financial market.

Can you hear me, can I ask a follow up please. Are you saying there's Solvency II positive impact, but there is an economic capital positive impact.

What that means is that in the Solvency II, that means we don't - today we know excluding the US, our Solvency II level is around 200. So what I'm saying is what, it means that indeed we will - I don't expect that Solvency will change a lot, but in a way I believe that the quality of this Solvency II issue will be better.

That's my point.

Maybe Gerald answer question three on the growth prospect community.

Yes, so I believe that it's an important point because we believe that it will shift up AXA US growth, why because first of all this company will have more access to capital if needed. It will be more visible as an early stage company.

We should keep in mind that it will be a significant company, [indiscernible] companies, early stage companies in the US. So it will be more visible, it will be more comparable to PS and it will progressively managed with an US Solvency.

As you know today the fact that we have - that we're ruled by Solvency II mix today, we don't have access to some products reach, less capital intensity from a low capital from an FBC perspective, but of quite capital intensity from the Solvency II perspective. So that's why we believe that it's the work of the US company to benefit and be [indiscernible] according to us into a higher growth.

Thank you, Gerald. So let's come to the second question with role ownership.

We obviously, I mean we're announcing today the intention to IPO our US business which completely means that we're now focusing on the listing of our minority stake in AXA US and intend to continue to fully consolidate after the IPO. Post IPO and that's where your question comes, we have not yet decided what to do and we clearly remain opportunistic.

It's an question of the US market for us is very important, it's a market that is very innovative and the US is an important business for us. We need to look at market conditions, we need to look at our financial flexibility in the US and that we will be responsible.

Today we have no timeline, our full focus is on the really placing the listing of this minority stake and then we will see.

Thank you very much.

Hi. Thanks.

A couple of question, okay, this is one this was check on my understanding if what you just said about the RBC in the US So using three times sales like I get that sale is probably a 100 million at the end of the year. And I think your comment about being 200 actually US saying that basically the US is a 600% of RBC, two times you, three times to equivalence spaces.

So the US is broadly similarly capitalized to the rest of the group. And the second question is the looks into 1 billion change in 1 billion from debt to equity changes nothing.

And the third question is I guess sort of getting my head around the timing if you doing this and why you're doing it. So as you said this is the more equivalent to pays is in the US straight a lower PE ratio than accidentally so when this be kind of diluted to the group and given the uncertainty about the day and the capital treatment of captives.

The timing of this is also kind of strange as well. Why would you not wait until those two issues are resolved before going ahead with it .

Thank you.

Gerald, I think you are best place to answer these questions.

Okay. So you understanding is right.

So when you say that obviously speaking to the US capitalize today in solvency II framework just like those in hopefully that been that we are roughly at 20 points. The debt to equity while just because we believe that it's important to which is well capitalized and that mostly so that means that as you know it can and many times we go to questions about the way we capitalize the US business but most of it is welcomes to that and that's why it was quite normal to say after that it will be capitalized just in all the light capitalization because you know the as well be at the same level at - in comfortable level compared to convince the peer.

The third question is around the [indiscernible] I would say that and keep in mind you remember in December following the December earnings release with a lot of question about this. I repeats that a decrease, first of all about the we should say that in the present object was not mentioned but it could change but all the time being nothing is been said about the fact that we are you would be .

Say could we always said that the decline as at Greece in the tax rate in the US is the position for us. So it would be high definition but this is positive for the US market and throughout the IPO.

And on the captive uncertainty of about treatments as AXA.

We will see all the time being 80 or 90, but we are quite confident, we don't know yet what would happen. And we will see the volume, we will see as the volume so five times so each in that seems to the operations so that's we will see but no that side and again of can't do anything, is well capitalized and we have given well capitalized.

Okay. And just the quick question about the PE ratio in the kind of relative so as we actually trade in higher range more to prove in US spaces so this you think will change in line with.

So is it not going to be dilutive to the group?

No. I don't believe that you've talked too early to give you any answer to the PE is the way gets easy whether you do it some of the back to no, it's seeks talk too early to answer these questions.

Okay. Thank you.

Thank you.

Thanks, Andy. So further questions?

Thank you. And then, thanks for making today's announcement quite interesting I think the comments I had on the things I'm going over a bit boring.

So and I have three questions. One is on the - you talk about window of opportunity and I think would you answer to Andy Hughes was a is to do with the US tax.

And I just wondered if there's another angle to this window of opportunity which you mentioned it's an earnings growth or sales growth or some kind of positive on the US operations which you see or you've alluded to in which we haven't noticed. And the second is you talk about the capital structure the US operations sounded if you could give us some numbers on that how much of that how much of equity currently.

And then the third one is you talk about regulatory divergence, there is a lot of noise in the background by the way. The regulatory divergence and I just wanted to if you can clarify that a little bit because the answer so far suggests that the US operates on similar kind of Solvency part such as so I'm not sure when is regulatory divergence is and thank you very much.

Good. I would suggest that I would answer the first question.

Gerald will second and then I will go for the third one again. And the window of opportunity, I think you have sort of at this timeline as we concern where we are today with our US business and what that changed path and where do you want to go?

As I mentioned earlier in the half years we have significantly worked on strengthening business and solving that business. When you look today, where we are involved our business unique we shifted completely away from traditional product then much focus on the new generation of products.

And we've launched in the last time in the recent years two proportions one being with our corner stone, as the other one being FCS which is for a startup products and we high take up in the market that also reflects what specialized there earlier that's our goals within the US is as way constant momentum. Third, we received at the MicroEnsure economic involvement positive one with the new administration as coming in.

One thing to reduce the regulatory various and also one thing to push the requirement and as so we said at this point it is very important to us to go to the next step. We have obviously solve from our press release and also had significant and detailed discussion with our regulator, the department of financial services of New York and so they are response both also a really positive one and very supportive one which made us very confident that this is right timing to do it.

As George pointed out earlier, there is many avenues where we believe we can still grow because again we are launching a proposition which is not and a portfolio of life insurance, is the very compressive proposition, a successful light operator, a successful distribution platform with that as advisor, analyst therefore asset managers. If you put street together there is many more opportunity in terms of growth that we have not yet expected that do believe create growth momentum going forward.

And then I will straight go to your third question on regulatory divergence. When you look at the regulatory say tend to see and become very apparent to me when I was in the meeting the other day with all the international regulators from China to the US We have had equally had say that same meeting two, three years ago and it would been very much around how can we finalize how genius, stand ups, core regulation particularly for the insurance that are considered systemic and we see nowa very clear tend to see that most of those activities are being pushed out.

So if you look behind to the designation of being systemic and the question of the tenderforthe systemic and one around the LHLA the higher of the absorbents and the definition and the framework for this as been pushed time right want to both 2023, 2022 which means they have clear based on how are the two it was fixed into more than to our positioning the entire if you can look at the developments in NAIIC which is start too early to comment. But if you look at the tendencies way it's going and it is clearly not 100% alliance with Solvency II has more volumes into hedge US solution which have really led up to a conclusion that now is the right timing to both take the contest of where we are in the cycle of all the entity take branches of the market momentum and also take advantage of the regulatory opportunity that equivalent itself.

And Gerald, I think on the capital structure.

Michael. Just have a look at the second Page of the press release in the IPO and you will notice that we put down the few figures and the US cap share in the equity of [indiscernible] 15.3 on the group share .

Please keep in minds that you there is only 29% of AB which is in that site grateful which mean I had seen so. The global outlook exposure take a 64% toward that means at job on top 75% that will come into opposite.

So and you should keep in mind that 100% capitalization of AB as well every percent you see billion. So that what they can tell you but again let's with for the S1 and we will have time.

At the time, it will be gone just to give you one the details about functional structure of the IPOs company but and it's beat the metric today.

Thank you, Gerald. Thank you, Michael on the questions.

Thank you.

Thank you and good morning. I have few quick questions from me.

Firstly, is on the debt for the US so wonder if you how is that being converted into equity. Just wonder if you current how much that will still remain to the rest of the group.

What will happen with that residual debt and I hope be treated. Secondly, it doesn't mean want to that if you could remind us the size of the fair tax asset in the US Firstly just on the share buyback, just want to could you give us an update on how far you expect your high test to be in this regard going forward after the change this time around.

Thanks.

The good be good IPO, just have attend these questions again because the line was not the greatest. Andy if I get it correctly, one was how much US debt remains as more before or today.

The second one was on the deferred tax asset in the US And the third was on the share buyback and what would be a practice in the future given that we changed approach on the share buyback today.

Correct.

Gerald that is normally your question.

Yes. This was one on the debt.

We've to be given net debt to in a AXA US balance sheet of this group. On top we have only getting minor about the fixed and on debt which we default EBITDA and inflation 1 billion income [indiscernible] that costly what you say what is that state.

EBITDA

Firstly down from that I just wonder if you can confirm the expectations for our schedule debt to the rest of the group really expect that to be retained and I will be treated going forward. Thanks.

Again what we said today that we be there we are going to invest 1 billion in equity but its again it could match you we tell you what will be realized. We're not speaking in competitive after announce it takes through the data and again we give you much more detail about this.

Let's wait and see the latter on in the year and there we will give you all this.

Thank you, Gerald. Thanks Andy for your questions.

Just one more you said by perhaps share buybacks [indiscernible] But it is a share buyback I believe that here what we said up to now is that we would the dilutive effect. So that's the first press release we've achieve to the 77 million shares that we proposed to buy and to the end of the year.

Illustrate these point also there we are we believe that favorably could be better to do it in advance that I means that instate of they explained that briefly and as you can price for leasing instead of doing it year after the year, we believe that is better to take into account the amount that state can be future dilution taking into account the already complete benefits. So that's a fit and starts concern.

No I believe that taking to account of the facts we said and that's we will keep. Our commitments to an underlying on these per share with the [indiscernible]between 77% For sure, we have to be and take into account the fact that is for any reason the investment we've been five is the hiking business inline is what am explained.

And then we would position to sell over BREXIT.

Thank you, and sorry that I must say the size of the deferred tax asset in the US?

We will come back, we will come back to you. We will come back you in these points.

Thanks.

Thank you, Andy.

Thank you. On the US IPO, is there an expectation that the proceeds on are to be retained will be retained within the US or likely to be utilized across the group or perhaps we deployed elsewhere and to say Asia, that's the first question.

Second question on the operating trends in Asia some strong growth in their business volume in particular in China. You mentioned the mix effect because you also give clarity on the product margin developments there and how we should be thinking about 63% growth quarterly growth in terms of the remainder of this year and perhaps a little bit beyond that.

Thank you.

So maybe I will take the first question. Gerald takes second.

The proceed I mean since we are global group since we operate in many countries and since we have also spotted our opportunity in the US but also outside the US and it is true that we will redeploy the proceeds that we were get across the world. As somehow was can be in the US but it will be for sure that at the US But we have a very clear on where we want to invest in what kind of land or business.

As far as China is concerned and as far Southeast Asia is concerned. So what we have been doing that in China.

We have a future growth in APE it was 7% growth in APE, at the same time the NBV margin is increasing quiet significantly. You remember one time when you are grouped that there was a kind significant emotions of because we had legacy margin on the NBV margin in China.

Now, we have a margin which is not great that 16% quiet because we so much more protection and hence which is exactly 9 results strategy and that means that we saw in CBC we're selling more business but at the same time higher quality business is the low protection . So that's it.

We will see how it evolves but it's clearly what we want to do and across the both I would say in Southeast Asia we have an improvement in our NBV margin. It's cases well almost more modest in Indonesia.

So that's rule and I could say that it's also case in Hong Kong and some of you could notice at if we had slight APE decline just because we prefer to give up and to not to stop before that which through capital intensive product just because we want to talk and so long as we want to privilege high profitability products, we took the decision to stop this product.

It's very much in line also with what we presented in June last year where we did not focus on volume but very much on the portion of business mix NBV.

Okay, thank you.

Yeah, good morning, thanks very much. Just three questions, if I may.

The first question, just on the US loan, that's obviously recorded as receivable in your parent company and I can see you received about 3.5 billion. If you do a debt to equity conversion then effectively 2 billion remains outstanding, will that 2 billion be repaid to foreign auto or does that stay in the US entity as capital is the first question?

The second question is of the IPO is that all going to be secondary or is it some primary in the IPO? And third question is in your buyback look to take presence over reinvestment of the business given the earnings dilution, is it a fair an assumption or is it not a fair assumption?

Thank you.

Thank you very much Jonny for your questions. Gerald, I think you are the best to answer this.

Okay, as far as the US loan is concerned that means that we received, but if I'm telling you Jonny that we had 1 billion that will be converted into equity, it's not more, it's around 1, so that means that you cannot anticipate that it will be converted into equity. We really see whether it will be really repaid or not and this will be detailed again in this as well.

It will be a secondary offer and not a primary offer, is that clear. And your third question on the clarity of buybacks versus reinvestment.

Yeah, of course the point is, so long for us and I believe that it's exactly what Thomas told you this morning. That means that we will try as much as possible to reinvest in our business lines.

But again we will be disciplined. That means that we won't invest in business lines which don't correspond to our strategy priority.

And in such a case we would preferred to do buyback, that's the way I can explain it.

Thank you.

Thank you Jonny for your questions.

Good morning all. Could I ask three questions?

The first one is in Ambition 2020, you said that you would invest a price of a billion year in net in capital management, I was wondering whether the forgiving of the internal loan of a billion plus 900 million buyback is part of that or outside of that. The second question is really about cash dividends from the US, your company had a record very high remittance of cash amount to group and I was wondering as a public entity with a sort of public dividend policy whether you thought that the US business would be returning in the future the same level of cash to group as it did as part of you.

And then thirdly, just I was wondering to understand what the reinvestment raise is on your business this year given the slightly higher co yields but narrow spreads, has it changed much relative to the average for last year.

Gerald, I think you should take those?

Okay, the 1 billion - your first question Andrew is about Ambition 2020, it's not that we have 1 billion for investments per year, is 1 billion the answer is no. The second question is the decision on the US, It will be done but so long as we want to lease that company in the US, it's important for us for this company to be attractive.

In order to be attractive we will do our best in order to have dividend which is quite interesting and in line with the expectation of the investors. The second part of your question which is we release of the same level of cash.

As you know over the last years, we're benefiting from some investment of existing debt, which means that I would say our remittance ratio about the 75% to 85% bracket and indeed this is something which was - and that I presented at that time [indiscernible] you notice that we reiterated the fact that the level of net remittance on the cumulative basis between 25 and 27, meaning that we keep the same assumption as the ones that we presented on the 21 June last year, which means that we will stick to our guideline from 75% to 85% remittance, so that's what I can tell you. So in other words it's necessary to say we don't anticipate that these decisions of IPO the US will have a negative on our expectation for remittance.

[indiscernible] The reinvestment for the time being globally, we're betting at around 2%, slightly above 2% on the chronicle disease, but we will see because it's quite early but we could expect - that rate seems to be slightly higher these days at 40 basis points for the wounds and 240 for G bond tenures in the US. We could be slightly higher, but we should renegotiate because at the same time the spread tends to compress.

So that's the uplift in annuities, but for the time being we are around 2.

Thank you.

Good morning, I've got three questions. The first is, I'm just trying to work out what the primary motivation is for this announcement today.

Is it that you've actually found the need or indeed more opportunities for built on acquisitions and therefore the US is a convenient operation to sell or is the decision mainly driven by something that's changed your view on the US because this does seem to be a very different outcome from what was in you five year plan. Second question I've got is on solvency, as I understand the Solvency II ratio will reflect the US on an equivalent basis for as long as you own a majority stake, is that right and if that is true, you're going to be spending money on acquisitions which may well involve some good will, you might be returning some cash.

The US operation meanwhile will be investing more on a US regulatory basis, which is presumed therefore negative from your perspective and I'm just wondering, does that all imply that the Solvency II ratio will naturally come down over the next couple of years as all of that happens. And the third question I've got is on M&A sort of thresholds in terms of IRRs or ROIs or timeframes.

Historically you've taken quite a long view of the payback period for M&A and I'm just wondering whether you're prepared to give some more near term silks on IRRs and payback periods.

Thank you, Oliver for your question. I'll take the first one and I'll suggest that Gerald takes two and three.

Our primary motivation is a very simple one, we want to accelerate on Ambition 2020, but we've presented to you last year, with a very few commitment to sale. We want to shift our portfolio more towards health and protection, more towards commercial P&C and want to reduce our dependence on the financial markets.

You've seen in the Q1 result, but also in the full year result of last year that we're not only fully committed, but that we have also delivered on this and this will continue. We are confident that given the climate in the US and [indiscernible] that our US entity is in that we can accelerate those Ambition 2020.

So you should be happy that we're going in the direction in order to do even more of the shift. What makes us confident, it makes confident that we had to look market-by-market on a very detailed level where are the targets that are interesting for us and how could we get to them and be assured that we will be very active now to pursue those targets.

Again I want to remind you that when we see both health and protection and commercial and P&C, health and protection is a market where we don't find so many [indiscernible] since we are one of the very few that is focused on health. And on the commercial and P&C business , we're not talking about the last risks where we find many players being active, we're talking about the SMP production markets where again we are one of the very few who have that very dedicated focus.

Now, Gerald if you could comment on the Solvency II question of Oliver and the M&A payback question.

Yes, Oliver as far as Solvency II is concerned we said that - so you have understood our explanation consentient in saying that progressively we'll be - we'll have an economy capital which will be less dependent from the equivalence, so the quality of our capital would be higher. But at the same time we don't see rise, we have no intent to revise the 170% to 250%, so don't expect us to change I would say our state of mind while I speak to this.

And we can stay between this [indiscernible] while having a quality of capital, which is quite good and improved. About the M&A, [indiscernible] return on the equity is 10% to12% [indiscernible] so you can imagine that while investing we cannot invest without taking this into account.

In other words it means that we have to speak to this ROI because we believe it's important for us. It's important to keep the revaluation of our book and that's why we don't give up and we don't intent to give up on that side.

We probably got time I would say - we're bit of overtime. I think we probably got time for one more question if there is one.

Hi there, Edina from Deutsche Bank from the other side. Two questions please.

You mentioned that your M&A budget is up to 3 billion, would you consider looking to use only the IPO proceeds or would you consider a mix of IPO proceeds in that for financing. And the second question, you mentioned that you're looking to do the IPO in the first half of 2017, would you consider pre financing with that if you find a good M&A opportunity before that?

So I mean I think you two questions. To clarify again, it's the M&A budget, you mentioned 3 billion, [indiscernible] So our M&A budget is 1 billion per year, net 1 billion over the period of Ambition 2020 from lower '16 to 2020, so in total 5 billion net.

What that means is that we will obviously take this money plus the proceeds from the IPO to invest in mixed type views in our target segments health and protection and commercial and P&C. We would like to focus on this in the order of magnitude between n1 billion and 3 billion.

And as you pointed out in your second question the IPO is roughly in the year, so if we find a target beforehand that is still attractive that we need to make a move before hand, we would slip it. We'll do everything to find solution to realize that acquisition.

In general we really want to stick to what we said last June, 1 billion net every year and as soon as the proceeds arrive from that IPO, we would then go and use them but obviously the time to prepare yourself for this does stop now or has already stopped.

Okay, thank you.

Okay thank you Thomas and I think we probably need to finish off there. It's bit overtime.

Thank you all very much for joining the call and I wish you a very good day. Thank you.

Thank you very much.