(3,1 EUR, 0,95%) aims to cut cost base in The Netherlands by € 100m. The news does not come as a surprise and does not prompt changes to our TP and/or rating.
will makeits business in The Netherlands more agile and better positioned to respond to changing conditions and opportunities in the Dutch market. The restructuring plans are an acceleration of previously announced strategic plans and will see the scrapping of approx. 300 positions.
The costs of the reorganization are expected to total approx € 60m, all of which should be accounted for before YE11. The reorganization program and other initiatives will result in reducing Aegon’s cost base in The Netherlands by € 100m (relative to the FY10 level). Most of the cost savings are expected to be achieved in 2012.
The cost reduction plans had been pre-announced for a considerable period of time, but due to ongoing negotiations with labour unions have only now been detailed. The € 100m cost reduction should offset the longevity cost of approx. € 80m per annum for the next 5 years.
We stick to our Buy rating and € 7.0 TP.