GENERALI GROUP 9M 2014 Results Please note that prior year’s figures have been restated throughout the whole presentation to reflect the new perimeter of the Group. Net income, Shareholders’ Equity, Solvency I, Life Value KPIs are not adjusted for disposed entities. The like for like change of written premiums, life net inflows, APE and NBV is on equivalent terms (on equivalent exchange rates and consolidation area). © Generali November 6, 2014 9M 2014 Results 2 Agenda - Profit & Loss and Balance Sheet Page 3 - Business review Page 9 - Backup Page 24 © Generali November 6, 2014 9M 2014 Results 3 Agenda I. Profit & Loss and Balance Sheet © Generali November 6, 2014 9M 2014 Results Profit & Loss 4 Key 9M 2014 financials at a glance Operating Result: Strong positive development thanks to all business segments Life: Positive performance with improved investment results and lower expenses P&C: Increase driven by significantly better combined ratio Costs: general expenses down 1%(1) year on year at €4.6bn despite higher activity levels Net Result: Stable reflecting gains from discontinued operations last year (Profit after tax from continuing operations +7.5%(1)) Solvency I: Significant improvement of Solvency capital position thanks to successful placement of subordinated bond and financial market development. 169% pro-forma for disposal of BSI 9M13 9M14 LFL D 3Q13 3Q14 LFL D Operating result (€ m) 3,259 3,677 +12.8% 964 1,164 +20.8% Operating RoE(2) 9.5% 10.9% +1.4%pts. 2.7% 3.5% +0.8%pts. Net result (€ m) 1,591 1,588 -0.1% 510 513 +0.6% EPS (€) 1.03 1.02 -0.8% 0.33 0.33 -0.1% Net operating EPS (€) 1.06 1.25 +17.5% 0.30 0.41 +34.6% Shareholders’ equity(3) 19,778 22,538 +14.0% Solvency I(3) 141% 160% +19%pts. November 6, 2014 9M 2014 Results © Generali (1) On like for like basis (2) Not annualized (3) Comparative data FY13 Profit & Loss 5 Operating result by segment +12.8% (€ m) 3,259 228 9M13 LIFE 49 157 3,677 11 (27) P&C FINANCIAL SERVICES HOLDING EXP. CONS.AD 9M14 2,300 1,482 323 (290) (137) 9M13 2,071 1,325 274 (264) (148) D +11.0% +11.8% +17.8% +10.2% -7.4% © Generali November 6, 2014 9M 2014 Results 9M14 Profit & Loss 6 From operating result to net profit (€ m) Including: - € 104 m: VOBA amortization 3,677 (7) (606) (299) 1,588 Including: - € 564 m: Interest costs OPERATING RESULT NON OPER. INVESTMENT INCOME NON OPER. HOLDING EXPENSES NET OTHER NON OPER. EXPENSES (996) (19) INCOME TAXES DISC. OPERATIONS MINORITIES NET RESULT (161) 9M14 3,677 (7) (606) (299) (996) (19) (161) 1,588 9M13 3,259 (1) (594) (301) (719) 150 (205) 1,591 D +12.8% n.m. +2.1% -0.4% +38.6% n.m. -21.1% -0.1% © Generali November 6, 2014 9M 2014 Results Balance Sheet 7 Shareholders’ equity Shareholders’ equity rollforward (€ m) +14.0% 3,177 1,588 22,538 (701) 19,778 (1,304) Including: - € 635 m: GPH buyout - € 130 m: GDH squeeze out - € 492 m: defined benefit plan SHAREHOLDERS' EQUITY FY13 Δ in AFS RESERVE 9M 2014 NET RESULTS DIVIDEND OTHER Change in AFS reserve (€ m) 3,246 193 5,678 IMPACT BOND INVESTMENTS OTHER AFS RESERVE 9M14 2,501 (262) AFS RESERVE FY13 © Generali IMPACT EQUITY INVESTMENT November 6, 2014 9M 2014 Results SHAREHOLDERS EQUITY 9M14 Capital 8 Solvency I Solvency I rollforward (%) Significant improvement of Solvency capital position despite the impact of remaining GPH minorities acquisition, driven by: Solvency I ratio sensitivities (%) Result of the period Total ratio 30.09.2014 Successful placement of subordinated bond Financial market development Equities -30% 160 150 Impact of BSI disposal (+9%pts.) expected to close by 1H15 +19%pts. 141% 10%pts. (3%pts.) SOLVENCY I FY13 REQUIRED MARGIN GROWTH 5%pts 15%pts Interest rate +100bps 160% Interest rate 100bps 177 (8%pts.) M&A (1) CONSOLIDATED RESULT SUBORDINATED DEBT FINANCIAL MARKETS AND OTHER Credit spread + 100bps 153 Real estate -10% 156 SOLVENCY I 9M14 (2) (1) Including disposal of Fata Danni (+1%pts.), acquisition of the 24% minorities of GPH (-7%pts.) and of 4% minorities squeeze out of GDH (-1%pts.) (2) For interim closings, no accrued dividends are deducted from available margin © Generali 142 November 6, 2014 9M 2014 Results 9 Agenda II. Business review © Generali November 6, 2014 9M 2014 Results Life Insurance 10 Life key financial indicators (€ m) 9M13 9M14 LFL D 3Q13 3Q14 LFL D Gross written premiums 32,801 35,728 +9.6% 9,685 11,536 +19.5% Net inflows 6,515 9,118 +41.7% 1,580 3,193 +102.8% Life operating result 2,071 2,300 +11.0% 591 748 +26.7% 62 61 -1 21 24 +3 3,211 3,666 +12.7% 908 1,146 +23.3% New Business Value 670 934 +42.0% 197 283 +42.2% Margins on APE (%) 20.9% 25.5% +5.3% 21.7% 24.7% +3.3% Life operating ratio on investments (bps)(1) APE (1) Not annualized © Generali November 6, 2014 9M 2014 Results Life Insurance 11 Life Operating result by driver Strong improvement driven by the investment result and decreasing expense ratio Technical margin lower due to policyholder share of lower expenses, and lower risk result +11.0% © Generali 2,300 9M14 214 2,071 (€ m) 206 (190) 9M13 TECHNICAL MARGIN INVESTMENT RESULT EXPENSES 9M14 4,026 1,705 (3,430) 9M13 4,216 1,491 (3,636) D% -4.5% +14.3% -5.7% November 6, 2014 9M 2014 Results Life Insurance 12 Life inflows and technical reserves(1) Sharp increase in net inflows (+ 41.7%) Life Inflows (€ m) 9M13 9M14 Italy 788 3,652 France 67 398 3,635 2,183 Germany Excellent performance in Italy and EMEA Recovery in France in 3rd quarter Decrease in Germany due to contraction of cash-in following planned reduction of single premiums Overall growth in reserves of 5.3% from end 2013 (of which +11.3% increase in unit linked) 5.3% (€ bn) CEE 424 359 1,174 2,194 Lat. Am. 216 187 Asia 184 125 EMEA 325.3 1.3 10.6 9.1 (3.9) 58.9 65.6 276.8 266.4 International TOTAL 26 20 6,515 9,118 FY13 NET INFLOWS LOADINGS, RISK & SURRENDER RESULT POLICYH. SHARE OF INVEST. RESULT Unit linked (1) Including liabilities related to investment contracts © Generali November 6, 2014 342.4 9M 2014 Results EXCHANGE RATES & OTHER Traditional 9M14 11.3% 3.9% Life Insurance 13 Life investment performance Life segment general account (%) Euro 282.4 bn Euro 314.1 bn 1.9% 3.8% 3.5% 4.7% 1.7% 2.3% 3.2% 4.1% 8.1% 34.6% 8.9% 35.0% Current returns (not annualized) Euro m % 9M13 6,929 2.94 Real estate 9M14 7,143 2.72 Equity 9M13 343 2.73 9M14 386 2.98 9M13 449 4.53 9M14 442 4.42 9M13 7,976 2.90 9M14 8,178 2.74 Other Cash & cash equivalent Fixed income Equity Other fixed income Corporate bonds Real Estate 43.3% 44.9% Government bonds Total FY13 © Generali (1) 9M14 (1) (1) Net of depreciation expenses November 6, 2014 9M 2014 Results Life Insurance 14 Life new business analysis Excellent APE development (+12.7%) on account of good growth for both annual (+5.8%) and single premiums (+23.1%) NBM improves (+5.3p.p. on homogeneous basis) on account of the reduction of guarantees offered (in Euro area from 1.20% at 9M13 to 0.93% at 9M14) and of the higher profitability of unit linked business Solid NBV at Euro 934 m (+42.0%) (€ m) APE NBV Margin on APE (NBM) 9M13 9M14 LFL r 9M13 9M14 LFL r 1,235 1,706 +38.2% 219 474 +116.7% France 573 627 +9.6% 76 77 Germany 724 608 -20.4% 181 CEE 126 103 -13.9% EMEA 441 514 Lat. Am & Asia 112 3,211 Italy Total © Generali 9M14 LFL r 17.8% 27.8% +10.1% +1.7% 13.2% 12.2% -0.9% 195 +2.7% 24.9% 32.1% +7.2% 56 33 -24.9% 44.5% 31.9% -4.7% +12.2% 113 141 +22.2% 25.7% 27.4% +2.2% 109 +10.9% 25 14 +53.0% 22.6% 13.3% +3.7% 3,666 +12.7% 670 934 +42.0% 20.9% 25.5% +5.3% November 6, 2014 9M 2014 Results 9M13 P&C Insurance 15 P&C key financial Indicators LFL D 9M13 9M14 Gross written premiums, of which: 15,915 15,564 -0.2% 4,439 4,395 +1.2% 6,549 8,827 6,319 8,748 +0.2% +0.0% 1,857 2,422 1,803 2,442 +0.3% +2.4% 95.0% 93.6% -1.4%pts. 95.8% 95.0% -0.7%pts. 2.5% 1.2% -1.3%pts. 3.5% 1.0% -2.5%pts. 425 448 Primary Motor Primary Non Motor Combined ratio (%) Of which: Nat Cat impact (%) P&C operating result © Generali 1,325 1,482 November 6, 2014 +11.8% 9M 2014 Results 3Q13 3Q14 LFL D (€ m) +5.4% P&C Insurance 16 P&C Operating result by driver Improving result reflecting better underwriting margins +11.8% 13 152 1,325 (9) (€ m) © Generali 1,482 9M13 TECHNICAL MARGIN INVESTMENT RESULT OTHER 9M14 860 770 (147) 9M13 707 757 (139) D% +21.6% +1.7% +6.2% November 6, 2014 9M 2014 Results 9M14 P&C Insurance 17 P&C gross written premiums trends 9M13 9M14 LFL r Italy 4,304 4,155 -3.5% France 2,162 2,002 -7.4% Germany 2,804 2,881 +2.7% CEE 1,498 1,446 +0.2% EMEA 3,384 3,394 +0.3% Lat Am 843 773 +23.2% Asia 77 78 +3.1% International 842 835 -0.9% 15,915 15,564 -0.2% (€ m) Total © Generali November 6, 2014 Overall stable premium development: Decline in Italy primarily driven by Motor. Growth in Personal and Commercial lines offset by lower premiums in Accident & Health Decline in France driven by a competitive market environment and portfolio restructuring activities Improvement in Germany thanks both to Motor and Non-Motor (driven by Personal and Commercial) Sharp increase in Latin America (on like for like basis), mainly driven by Argentina (reflecting inflation effect) 9M 2014 Results P&C Insurance 18 Combined ratio analysis Expense ratio (%) - 0.1%pts. 26.8 Combined ratio (%) Administr. costs - 1.4%pts. 95.0 93.6 (0.1) Acquisition costs 5.9 26.8 (0.1) 5.8 21.0 20.9 Δ%pts (1.4) 26.8 (0.0) 26.8 9M13 Δ Admin Δ Acq. 9M14 Loss ratio (%) - 1.4%pts. 68.2 68.2 66.8 (0.3) 9M13 9M13 Δ Expense ratio Loss ratio © Generali Δ Loss ratio 9M14 Expense ratio November 6, 2014 9M 2014 Results 0.2 66.8 (1.3) Current year NAT CAT Prior years 9M14 9M14 69.6 1.2 -4.0 66.8 9M13 69.8 2.5 -4.2 68.2 P&C Insurance 19 Combined ratio by country COUNTRY Combined ratio improving in Italy, despite Nat Cat impact (+0.9%pts.) ∆ 9M13 9M14 Italy 91.6% 89.1% -2.5%pts. France 101.0% 105.4% +4.4%pts. Germany 95.9% 93.5% -2.5%pts. CEE 89.5% 87.3% -2.1%pts. EMEA 95.7% 94.5% -1.2%pts. Lat Am 103.8% 107.7% +3.9%pts. Asia 133.6% 96.6% -37.0%pts. International 90.4% 81.2% -9.3%pts. Total 95.0% 93.6% -1.4%pts. © Generali November 6, 2014 Combined Ratio in France strongly impacted by Nat Cat (3.2%pts.) and portfolio restructuring activities Germany and CEE, benefitting from lower Nat Cat events (significant flood losses in 2013) 9M 2014 Results P&C Insurance 20 P&C investment performance P&C segment general account (%) Euro 37.7 bn Current returns (not annualized) Euro 39.7 bn 1.1% 10.0% 1.5% 8.7% 13.1% 12.6% Other Euro m % 9M13 653 2.56 Fixed income 9.9% 10.0% Cash & cash equivalent 9M14 662 2.54 6.5% 9.9% Real estate 9M13 67 2.40 9M14 100 2.62 9M13 232 4.48 9M14 212 4.28 9M13 1,040 2.82 9M14 1,021 2.61 Equity Equity 30.2% 33.6% Other fixed income Real Estate Corporate bonds 29.1% FY13 © Generali 23.7% (1) Government bonds Total 9M14 (1) (1) Net of depreciation expenses. November 6, 2014 9M 2014 Results Financial Segment 21 Financial segment key financial indicators 9M13 9M14 Operating result (€ m) 274 323 Net fees and commissions (€ m) 341 378 50.0% 47.3% Cost / income ratio (%) Third party AUM(1) (€ bn) 36.5 39.1 LFL D 3Q14 +17.8% 79 97 +22.8% +10.8% 104 127 +21.8% 50.8% 47.4% -2.7%pts. +6.9% (1) Comparative data FY13 © Generali November 6, 2014 LFL D 3Q13 9M 2014 Results -3.4%pts. Final remarks 22 Final remarks Pro-forma Solvency I ratio at 169%, comfortably above target level Strong improvement in operating result, driven by all segments Continuing momentum in life volumes and inflows, with improved mix Strong improvement in P&C profitability driven by lower nat cat and improving underlying margins © Generali November 6, 2014 9M 2014 Results Liability Management transaction 23 Liability Management transaction – Key elements Overview: Partial Cash Tender on 3 outstanding Hybrids: Issuer Generali Finance BV Generali Finance BV Generali Finance BV Nominal value issued Currency 1,275 m EUR 700 m GBP 1,250 m EUR Coupon % 5.317 6.214 5.479 Issue date 16 June 2006 16 June 2006 8 February 2007 Maturity Perpetual Perpetual Perpetual Call date 16 June 2016 16 June 2016 8 February 2017 Purchase price 105.875 % 104.875 % 107.000 % New Issue of Euro denominated Perpetual Fixed/Floating Rate Notes Conditions & Features: The Cash Tender is conditional upon the successful completion of the New Issue Final acceptance amount in the Cash Tender capped at (no more than) the amount of Hybrids that can be purchased using the proceeds raised in the New Issue; pro-ration at the Offeror’s discretion if cap is exceeded Fixed purchase prices in the Cash Tender and market standard bookbuilding process for the New Issue Priority allocation in the New Issue for holders tendering outstanding Hybrids Holders seeking priority allocation should request an Allocation Code from the dealer manager banks and include it in their Tender Instruction and New Issue order, as described in the Tender Offer Memorandum Rationale: Extend economic duration (to call) of solvency capital instruments Efficiently manage capital structure ahead of Solvency II Take advantage of low rates environment to secure an attractive running cost for the New Issue Provide liquidity to investors Expect broadly neutral impact on financial leverage and solvency capital Timeline: Tender Period: Thursday 6th November to 5pm (CET) Thursday 13th November Results: After pricing of the New Issue, which will follow the Tender Period and be no later than 21st November Settlement: 5 business days after New Issue pricing for both the Cash Tender and New Issue © Generali November 6, 2014 9M 2014 Results 24 Agenda II. Backup - Investments Page 25 - Financial debt Page 30 © Generali November 6, 2014 9M 2014 Results 25 Agenda II. Backup - Investments Page 25 - Financial debt Page 30 © Generali November 6, 2014 9M 2014 Results Investments 26 Assets under management Total portfolio € 465 bn Breakdown by region and asset class Italy 4% By Region France 3% 10% 31% Germany CEE 29% General account Unit Linked 23% 9.1% EMEA RoW and other operations 14.1% 76.8% 3% Third party AUM 1% 4% 5% Equity Fixed income Real estate Cash & Cash Equivalent By Asset Class 87% © Generali November 6, 2014 9M 2014 Results Other Investments 27 Fixed Income Portfolio Corporate € 93 bn Covered € 31 bn Total Portfolio € 312 bn 1% 1% 10.0% 2% 0% 1% 7% 10.5% Government € 155 bn (1) 10% 14% 4% 8% 10% 10% 46% 16.9% 37% 71% 34% 40% 12.9% Other fixed Income 4% Covered Corporate non fin. AAA AA A Not Investment Grade Not Rated 49.7% Corporate fin. Government Fixed income duration FY13 9M14 Life 7.2 8.0 P&C 4.0 4.6 (1) Italian government bond exposure is 84% of BBB © Generali BBB November 6, 2014 9M 2014 Results Investments 28 Equity & Equity-like Total portfolio (€ 17 bn) Equity (€ 10.9 bn) Alternative investments (€ 2.7 bn) Life, P&C and Financial 21% Life, P&C and Financial 1% 24% 15% 14% 65% Life Life P&C P&C Financial 75% Financial 22% 63% 0% Listed and Unlisted 24% Life, P&C and Financial Equity Equity Funds 17% Alternatives Quoted 76% Life 83% Unquoted P&C Financial © Generali November 6, 2014 9M 2014 Results Investments 29 Real Estate (1) Total portfolio (€ 25 bn (1)) 4% 6% Breakdown by use (2) Office 11% Retail 15% Residential Breakdown by utilization (2) 64% Logistic 15% Other/Mixed Investment properties Own use Breakdown by country (2) 1% 85% Italy 20% 37% 2% France Germany 16% CEE 24% RoE RoW (1) Data, at fair value, includes indirect investments, investment properties, own use assets and property inventory (2) Detail referred to direct investments in real estate only © Generali November 6, 2014 9M 2014 Results 30 Agenda II. Backup - Investments Page 25 - Financial debt Page 30 © Generali November 6, 2014 9M 2014 Results Financial debt 31 Debt refinancing operations completed Financing until 2016 call dates completed; € 1 bn net reduction in debt levels by end 2015 (€ bn) 1.0 1.3 12.8 12.9 (0.5) FY13 © Generali 12.2 (1.5) SENIOR BOND REPAYMENT SUB DEBT SENIOR DEBT ISSUED JAN OF INELIGIBLE ISSUED MAY REPAYMENT 2014 LOAN 2014 MAY 2014 (0.8) 9M14 NOVEMBER 2014 SENIOR MATURITIES 11.7 (0.5) EXPECTED FY14 2015 MATURITIES EXPECTED FY15 Advantage taken of market conditions to pre-finance until 2016 call dates: € 1.25 bn senior debt issued in January, with € 2.25 bn senior maturing this year (remainder financed from internal resources, in excess of 1/3rd target) € 1.0 bn subordinated bond issued in May to 1) Replace € 500 m ineligible loan at year end, and 2) Prefinance 2015 maturities of € 0.5 bn. Net € 1 bn improvement in debt position expected by 2015, with lower interest expenses ( € 60 m) November 6, 2014 9M 2014 Results Financial debt 32 Focus on financial debt Average cost & maturity of financial debt (%) Total financial debt (€ m) € 12,758 m FY13 9M14 5.93% 5.71% Subordinated/Hybrid 6.54% 6.41% Senior 4.81% 4.26% Average cost (%) Average maturity (years) 5.27 € 12,956 m(1) 678 603 7,612 8,133 4,468 4,220 FY13 9M14 5.71 Senior Sub/Hybrid Other (1) The amount of financial debt as of September, 30, includes the subordinated bond issued in May 2014 for a nominal amount of € 1 bn to refinance part of the 2015 maturities © Generali November 6, 2014 9M 2014 Results Financial debt 33 Financial debt breakdown(1) by expiry date/call date (€ m) 2,635 2,177 1,750 1,449 1,268 1,250 770 750 500 250 2014 2015 2016 2017 Senior 2018 2019 Hybrid 2020 2022 2024 Subordinated (1) This breakdown still takes into account the Senior bonds maturing in 2014 that will be reimboursed with internal resources and 2015 already refinanced. © Generali November 6, 2014 9M 2014 Results 2026 Disclaimer Certain of the statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The user of such information should recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions. Neither Assicurazioni Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document. The manager charged with preparing the company’s financial reports, Alberto Minali, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Financial Intermediation, that the accounting information contained in this presentation corresponds to document results, books and accounts records. © Generali November 6, 2014 9M 2014 Results 35 Next events 19.11.2014 2014 Investor Day 12.03.2015 FY 2014 results reporting 30.04.2015 Annual General Meeting 14.05.2015 1Q 2015 results reporting 30.07.2015 1H 2015 results reporting 05.11.2015 9M 2015 results reporting © Generali November 6, 2014 9M 2014 Results 36 Team Spencer Horgan Marta Porczynska Head of Investor & Rating Agency Relations Team Assistant & Event Manager [email protected] [email protected] +44 20 7265 6480 +39 040 671402 Stefano Burrino Martina Vono Senior IR Manager Team Assistant & Event Manager [email protected] [email protected] +39 040 671202 +39 040 671548 Emanuele Marciante Senior IR Manager - Credit & Rating Agency Relations [email protected] +39 040 671347 Veronica Cherini IR Manager [email protected] +39 040 671488 Assicurazioni Generali P.za Duca degli Abruzzi 2 34132 Trieste, Italy Fax: +39 040 671338 e-mail: [email protected] www.generali.com Rodolfo Svara IR Manager [email protected] +39 040 671823 © Generali November 6, 2014 9M 2014 Results 37 Thank you © Generali November 6, 2014 9M 2014 Results GENERALI GROUP 9M 2014 Results © Generali November 6, 2014 9M 2014 Results
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