Legal & General (LGEN:LN) today released its 2022 year-end earnings report. Below is a brief synopsis—for a more in-depth view, please access the full report through this link.
Strong financial performance1
- Operating profit of £2,523m, up 12% (2021: £2,262m)
- Profit after tax2 of £2,291m, up 12% (2021: £2,050m)
- EPS of 38.33p, up 12% (2021: 34.19p)
- Return on equity of 20.7% (2021: 20.5%)
- Solvency II coverage ratio of 236% (2021: 187%)
- As of 3 March 2023 we estimate the coverage ratio was 240%3
- Full year dividend of 19.37p, up 5% (2021: 18.45p), consistent with our ambition
On track to achieve our five-year (2020-2024) ambitions4
- Cash generation of £1.9bn, up 14%. Capital generation of £1.8bn, up 10%
Cumulative cash and capital generation on track with strong dividend headroom. To date:
- Cash generation of £5.1bn and capital generation of £4.9bn (£8.0-9.0bn by 2024)
- Dividends of £3.3bn (£5.6-5.9bn by 2024)
- Net surplus generation5 over dividends of £0.7bn
Good new business volumes and rapidly increasing international presence
- Global PRT new business premiums of £9.5bn (2021: £7.2bn), of which 23% international
- LGC alternative AUM up 21% to £4.2bn (2021: £3.4bn), of which 12% international
- LGIM AUM of £1.2tn, of which £441bn (37%) international
- LGIM external net flows of £49.6bn (2021: £34.6bn), of which 43% international
- Protection gross premiums up 8% to £3.1bn (2021: £2.9bn), of which 39% international
Sir Nigel Wilson, Group Chief Executive: "We have delivered another strong result in 2022, ahead of market expectations, with operating profit of £2.5bn and EPS of 38.3p, both up 12%, cash generation of £1.9bn up 14%, capital generation of £1.8bn up 10%, dividends up 5% to 19.37p and an ROE of 21%. Our diversified and highly synergistic business model continues to deliver significant benefits. Our balance sheet is strong and highly resilient, with a record solvency ratio of 236% and we have once again received 100% of cash flows due from our Direct Investments. At a time when many households are being affected by the rising cost of living, our commitment to inclusive capitalism is more important than ever to help improve the lives of our customers, build a better society for the long-term and create value for our shareholders."
ENDS
Footnotes
1. The Group uses a number of Alternative Performance Measures (including operating profit, net release from operations, return on equity and LGIM AUM) to enhance understanding of the Group’s performance. These are defined in the glossary, on pages 89 to 92 of this report.
2. Profit after tax attributable to equity holders.
3. Coverage ratio before the payment of the 2022 final dividend.
4. Cash generation defined as net release from operations and Capital generation defined as Solvency II operational surplus generation.
5. Net surplus generation defined as Solvency II operational surplus generation less new business strain.
Financial summary
£m | 2022 | 2021 | Growth % |
Analysis of operating profit | |||
Legal & General Retirement Institutional (LGRI) | 1,257 | 1,154 | 9 |
Legal & General Capital (LGC) | 509 | 461 | 10 |
Legal & General Investment Management (LGIM) | 340 | 422 | (19) |
Retail1 | 825 | 620 | 33 |
Operating profit from divisions | 2,931 | 2,657 | 10 |
Group debt costs | (214) | (230) | 7 |
Group investment projects and expenses | (194) | (165) | (18) |
Operating profit2 | 2,523 | 2,262 | 12 |
Investment and other variances (incl. minority interests) | 136 | 226 | n/a |
Profit before tax attributable to equity holders3 | 2,659 | 2,488 | 7 |
Profit after tax attributable to equity holders | 2,291 | 2,050 | 12 |
Earnings per share (p) | 38.33 | 34.19 | 12 |
Book value per share (p) | 194 | 174 | 11 |
Full year dividend per share (p) | 19.37 | 18.45 | 5 |
1. From 1 January 2022, our insurance (LGI) and retail retirement (LGRR) businesses have come together to form Retail. The new division will focus on the savings, protection and retirement needs of our c13m retail policyholders and workplace members.
2. Operating profit is an Alternative Performance Measure and represents Adjusted operating profit as defined on page 89.
3. Profit before tax attributable to equity holders is an Alternative Performance Measure and represents Adjusted profit before tax attributable to equity holders as defined on page 89.
About Legal & General Group
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion ($1.7 trillion) in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*as of December 31, 2021
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
Contact Details
Meir Kahtan Public Relations, LLC (MKPR)
Meir Kahtan
+1 917-864-0800
