PRESS RELEASE RESULTS AT 30 SEPTEMBER 2007

Transcription

1 PRESS RELEASE RESULTS AT 30 SEPTEMBER 2007 GENERALI GROUP: CONSOLIDATED NET PROFIT INCREASED TO 2.36 BN (+21.8%) STRONG GROWTH IN PROFITABILITY OF INSURANCE BUSINESS: OPERATING RESULT ROSE TO 4,098.7 MILLION (+26.5%) LIFE OPERATING RESULT (+27.1%); NON-LIFE OPERATING RESULT (+34.2%) COMBINED RATIO IMPROVES TO 95.4 % FROM 95.9% CONTINUED IMPROVEMENT IN PREMIUMS LIFE ANNUAL PREMIUM EQUIVALENT (APE) 3,107.8 MILLION (+8.1%) NON-LIFE GROSS PREMIUMS 15,655 MILLION (+17.4%) CLOSING OF THE SALE OF NUOVA TIRRENA TO GROUPAMA Milan, 31 October At a meeting today chaired by Antoine Bernheim, the Board of Directors of Assicurazioni Generali approved the consolidated report at the end of the third quarter of The Generali Group confirms its strong operating performance since the beginning of the year, closing the first nine months with a 21.8% improvement in consolidated net profit to 2,364.3 million ( 1,941.3 million at 30 September 2006). The earnings growth was the result of improved profitability in both the Life and the Non-Life segments. The contribution from Toro for the first nine months was approximately million. Antoine Bernheim commented: These figures confirm the four-year trend of continuously improving results and are a testament to a management strategy that has enabled the Generali Group to achieve excellent revenue and earnings growth. The conditions are in place for another strongly positive outcome for the full year for all our stakeholders, with an outlook of continued growth for Generali worldwide. The operating result saw significant progress (+26.5%) to 4,098.7 million, from 3,240 million at 30 September 2006 (+19.9% excluding the Toro Group). This reflected stronger technical results and improved financial operations in all areas of business. The Non-Life segment made a strong contribution, with growth of 34.2% (+19.6% excluding Toro), driven by Italy and France. The Life business also reported healthy improvement (+27.1%; +23.9% excluding Toro), thanks to strong performances in Italy, France and Germany. 1

2 Both segments reported production increases. Specifically, Life Annual Premium Equivalent (APE) amounted to 3,107.8 million, a year-on-year rise of 8.1% (+7.6% on a like-for-like basis). Non-Life premium income was 15,655 million (+17.4%; +3.5% on a like-for-like basis). Third-quarter consolidated net profit rose to million (+9.1%), thanks to an improvement of 22.3% in the operating result to 1,218.2 million. Nuova Tirrena Closing The Generali Group also announced today the closing of the sale of 100% of Nuova Tirrena to Groupama for 1,250 million. Announced on 2 August, the transaction has received the approval of all the relevant authorities. PERFORMANCE BY LINE OF BUSINESS Life segment The Life operating result was 2,387.3 million, a year-on-year increase of 27.1%, driven by an improvement in financial operations and technical margins. The operating result in Italy was 1,250.8 million (+20.9% on a like-for-like basis). The non-italian operating result was 1,136.5 million (+27.3%), with healthy progress in Germany (+18.9%) and France (+36.3%). Life Operating Results ( mln) 9 M 07 Percentage change Italy 1, % Germany % France Spain % CEE % RoW % Total 2, % New business value in terms of Annual Premium Equivalent (APE) was 3,107.8 million, (+7.6% on a like-for-like basis). Highlights included the positive contribution of the Group s proprietary channels in Italy and positive growth in France, Central Eastern Europe and Latin America. Gross written premiums were little changed (-1% on a like-for-like basis), despite the sharp downturn in the bancassurance channel due largely to the decrease in the number of Intesa Life agencies, which is due to the antitrust decision to reduce the number of agencies following the merger of Intesa Sanpaolo. 2

3 On a market-by-market basis, Italy reported new business value in terms of Group APE of million (+5.2% on a like-for-like basis). Gross written premiums decreased by 14.3% on a like-for-like basis, as a result of the reduction in bancassurance. In the traditional distribution channels, gross written premiums rose +16.5% and the gross written premiums from financial advisors rose +3.8%. In the area of supplementary pension plans for company employees, the Group reported more than 100,000 subscriptions to insurance products and open-ended funds. It will be possible to assess the real impact of this segment from next year. The international markets reported a 6.5% increase in gross written premiums on a like-for-like basis and an 8.7% improvement in new business value in terms of APE on a like-for-like basis, with excellent results in France (+15.1%), where performance countered the general market trend. Non-Life segment The Non-Life operating result was 1,511.4 million, a year-on-year improvement of 34.2%. This reflected stronger technical results and improved financial operations. On a country-by-country basis, the operating result in Italy, including holding costs, was million, an increase of % (+42% on a like-for-like basis). Abroad, the operating result was million (+13.1%), with improvements in France (+21.4%) and Central Eastern Europe (+72.8%). Non-Life Operating Results ( mln) 9 M 07 Percentage change Italy *% Germany % France % Spain % CEE % RoW % Total 1, % * (42% on-a-like for like basis) Consolidated premium income increased on a like-for-like basis by 3.5% to 15,655 million ( 13,339.6 million at 30 September 2006), confirming the Group s position as a leading player on the main markets. The Non-Life segment continued to report significant improvements in technical results. The combined ratio improved to 95.4% (95.9% at 30 September 2006); this reflected stable costs, unchanged at 26.2%, and a falling claims rate, down from 69.7% to 69.2%. Administration costs were largely unchanged at 6.1%. The combined ratio showed a strong improvement in Italy to 95.1% (97.2% at 30 September 2006); for non-italian operations it was 96.3%, with improvements in Austria (97.4% from 98.1% at 30 September 3

4 2006), Switzerland (96.8% from 97.6% at 30 September 2006) and Central Eastern Europe (89.9% from 91.7% at 30 September 2006). Financial Services The operating result in Financial Services was million (-5.5% year-on-year). Assets under management amounted to 358,485.3 million (-0.2% from 30 June 2007). Asset Management accounts for the bulk of the Financial Services business and focuses largely on management of the financial instruments of the Group companies. BSI and Banca Generali are the Group s two principal third-party asset management operators. ADDITIONAL HIGHLIGHTS Total investments amounted to 338,833 million ( 340,412.6 million at 30 June 2007). Own investments, excluding investments whose risks are borne by policyholders, totalled 287,559.4 million ( 288,748.6 million at 30 June 2007). Operating income from investments amounted to 12,071.4 million, a year-on-year increase of 12.4% (+9.6% excluding the Toro group). The increase of 1,330.5 million was largely due to interest income and other income, which rose by million. Interest expense on liabilities linked to financing activities amounted to million (+43.2%). The increase was largely due to subordinated loan issues relating to the acquisitions of Total shareholders equity amounted to 18,144.4 million ( 18,873.6 million at 30 June 2007). Specifically, Group shareholders equity decreased slightly to 14,676.4 million ( 15,467.3 million at 30 June 2007). The reserve for net gains on available-for-sale financial assets amounted to 1,847.2 million ( 2,360.6 million at 30 June 2007). The decrease was largely the result of lower unrealised net capital gains on equity investments. Furthermore, the cost of the shares owned by the parent company or by other Group companies is equal to 1,206.1 million ( million at 30 June 2007), reducing the Group s capital and technical reserves by this amount. The growth in the cost of shares is due to the implementation of the share buy-back programme. SIGNIFICANT EVENTS i) In July, Assicurazioni Generali and the PPF N.V. Group signed the final contract for the Generali PPF Holding N.V. joint venture, which is currently awaiting approval from the regulatory authorities. The new company will be one of the largest players in Central Eastern Europe. ii) In August, an agreement was signed to sell Nuova Tirrena to Groupama. 4

5 iii) In September, earlier than expected, the local authorities granted Assicurazioni Generali a licence to operate Life and Non-Life businesses in India through Future Generali India Life Insurance Company and Future Generali India Insurance Company, the companies formed through the joint venture with India s Future group, the leading local retailer. iv) In September, the Group s new Strategic Plan was approved; the Plan raises financial and industrial targets and introduces changes in the corporate centre, in the management of financial assets and real estate, and in the international growth strategy. On 29 October, the share buy-back programme was completed for a total amount of 1.5 billion at an average per-share purchase price of Finally, the Board of Directors extended the Euro Medium Term Notes (EMTN) Programme until 31 December 2008 and increased the total amount of the programme up to maximum of 3 billion, or an equivalent amount in different currencies (previously 2.5 billion). The EMTN Programme aims to optimise the financing costs of the Group and to manage in an efficient way the expiry of existing debt and envisages Assicurazioni Generali S.p.A and Generali Finance B.V. as issuers FULL-YEAR GUIDANCE In light of its technical results in the Life and Non-Life businesses and the measures already put in place to raise operating efficiency, the Group expects its full-year results to be higher than 2006, subject to exceptional events. *** Benoit Jaspar, the officer responsible for preparing the company accounts, declared, pursuant to paragraph 2 article 154 bis of the Consolidated Finance Act, that the accounting information contained in this release corresponds to the documented results, to the accounting books and to the accounting entries. The chief executive officer Giovanni Perissinotto will hold a conference call today at 15:00 CET to illustrate Group business and financial results at 30 September The entire presentation can be followed in real time via the following link: or by dialling the following numbers (listen only): Italy: UK: USA: Attachments: highlights and the consolidated profit and loss account and balance sheet. PRESS OFFICE INVESTOR RELATIONS Tel Tel Tel Tel Tel

6 DEFINITIONS AND GLOSSARY The Operating Result was defined by reclassifying the components making up the pre-tax profit for the year for each line of business and by considering the specific characteristics of each segment. In particular, in the Life and Financial Services segments, all profit and loss items were considered, with the exception of the following items that contribute to the non-operating result: 1. interest expense on borrowings; 2. realised gains and losses as well as unrealised profits and losses on shareholdings, equity investments and investments of strategic importance to the Group, net, in the Life segment, of the estimated quota borne by policyholders; 3. other net non-operating costs, mainly the results of discontinued operations governed by IFRS 5, and corporate restructuring costs. In Germany and Austria, in order to take account of the specific method used to calculate profits attributed to policyholders on the basis of the net profit for the year, the non-operating result of the Life segment in these countries was calculated entirely net of the estimated quota borne by policyholders. In order to guarantee a greater comparability with the main European competitors, as from the first quarter of 2007, operating result of Germany and Austria was not adjusted for estimated income taxes attributable to the policyholders. In the Non-Life segment, all profit and loss items were considered, with the exception of the following items that contribute to the non-operating result: 1. interest expense on borrowings; 2. realised gains and losses as well as unrealised profits and losses on investments; 3. other net non-operating costs, principally the results of discontinued operations governed by IFRS 5, measurement losses on property for own use and corporate restructuring costs. Annual Premium Equivalent (APE) = the sum of the initial premium on new annual-premium policies, plus one-tenth of premiums on new single-premium policies. This is the premium base used to compute Life new business value. Combined Ratio = ratio of the loss ratio + the expense ratio (general expenses + acquisition expenses) to premiums. 6

7 Highlights Three months ended Three months ended ( million) 30/09/ /09/ /09/ /09/2006 Result of the period 2, , Operating result 4, , , Net earned premiums 45, , , ,255.1 Premiums related to investment contracts 1, Net earned premiums including premiums related to investment contracts 46, , , ,498.8 Gross premiums written 48, , , ,612.6 Change on equivalent terms (*) 0.4% 3.0% - - Acquisition and administration costs related to insurance business 7, , , ,084.4 Expense ratio 15.6% 14.5% - - Operating result - life segment (**) 2, , Net life premiums 31, , , ,352.8 Premiums related to investment contracts 1, Net life premiums including premiums related to investment contracts 32, , , ,596.5 Gross life premiums written 32, , , ,865.5 Change on equivalent terms (*) -1.0% 3.4% - - Acquisition and administration costs - life segment 3, , , ,100.9 Expense ratio - life segment 11.0% 10.2% - - APE 3, , Operating result - non-life segment (**) 1, , Net non-life earned premiums 13, , , ,902.3 Gross non-life premiums written 15, , , ,747.1 Change on equivalent terms (*) 3.5% 2.3% - - Acquisition and administration costs - non-life segment 3, , , Expense ratio - non-life segment 26.2% 26.2% - - Loss ratio - non-life segment 69.2% 69.7% - - Combined ratio - non-life segment 95.4% 95.9% - - Operating result - financial segment (**) Total income - financial segment 1, , Total expenses - financial segment 1,

8 ( million) 30/09/ /06/ /12/2006 Investments 338, , ,744.0 Net insurance provisions (1) 305, , ,835.5 Net insurance provisions - life segment (1) 275, , ,856.0 Net insurance provisions - non-life segment (1) 29, , ,979.5 Provisions for outstanding claims and other insurance provisions 24, , ,990.8 Provisions for unearned premiums 5, , ,988.7 Shareholders' equity attributable to the Group (2) 14, , ,206.5 (*) On equivalent terms: on equivalent exchange rates and consolidation area compared to the same period of the previous financial year, and taking into account premiums related to investment contracts. (**) The amounts are calculated gross of consolidation adjustments. (1) The amounts are calculated net of consolidation adjustments. (2) The result of the period is included in shareholders' equity attributable to the Group. 8

9 BALANCE SHEET - ASSETS 30/09/ /06/ /12/ INTANGIBLE ASSETS 6, , , Goodwill 4, , , Other intangible assets 1, , , TANGIBLE ASSETS 3, , , Land and buildings (self used) 2, , , Other tangible assets AMOUNTS CEDED TO REINSURERS FROM INSURANCE PROVISIONS 5, , , INVESTMENTS 338, , , Land and buildings (investment properties) 11, , , Investments in subsidiaries, associated companies and joint ventures 1, , , Held to maturity investments 1, , , Loans and receivables 58, , , Available for sale financial assets 186, , , Financial assets at fair value through profit or loss 80, , ,671.8 of which financial assets where the investment risk is borne by the policyholders and related to pension funds 51, , , RECEIVABLES 11, , , Receivables arising out of direct insurance operations 8, , , Receivables arising out of reinsurance operations 1, , Other receivables 2, , , OTHER ASSETS 13, , , Non-current assets or disposal groups classified as held for sale Deferred acquisition costs 1, , , Deferred tax assets 3, , , Tax receivables 2, , , Other assets 5, , , CASH AND CASH EQUIVALENTS 6, , ,120.4 TOTAL ASSETS 386, , ,

10 BALANCE SHEET - SHAREHOLDERS' EQUITY AND LIABILITIES 30/09/ /06/ /12/ SHAREHOLDERS' EQUITY 18, , , Shareholders' equity attributable to the Group 14, , , Share capital and reserves 10, , , Reserve for unrealized gains and losses on available for sale financial assets 1, , , Result of the period 2, , , Shareholders' equity attributable to minority interests 3, , , OTHER PROVISIONS 1, , , INSURANCE PROVISIONS 311, , ,440.8 of which insurance provisions for policies where the investment risk is borne by the policyholders and related to pension funds 44, , , FINANCIAL LIABILITIES 36, , , Financial liabilities at fair value through profit or loss 7, , ,642.7 of which financial liabilities where the investment risk is borne by the policyholders and related to pension funds 6, , , Other financial liabilities 28, , ,225.3 of which subordinated liabilities 6, , , PAYABLES 7, , , Payables arising out of direct insurance operations 3, , , Payables arising out of reinsurance operations 1, Other payables 3, , , OTHER LIABILITIES 10, , ,663.3 Liabilities directly associated with non-current assets and disposal groups classified as 6.1 held for sale Deferred tax liabilities 4, , , Tax payables 1, , , Other liabilities 5, , ,281.8 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 386, , ,

11 PROFIT AND LOSS ACCOUNT 30/09/ /09/2006 Three months ended 30/09/2007 Three months ended 30/09/ Net earned premiums 45, , , , Gross earned premiums 47, , , , Earned premiums ceded -1, , Fee and commission income and income from financial service activities Net income from financial instruments at fair value through profit or loss 2, , , ,364.9 of which net income from financial instruments where the investment risk is borne by the policyholders and related to pension funds 1, , , Income from subsidiaries, associated companies and joint ventures Income from other financial instruments and land and buildings (investment properties) 11, , , , Other income 1, , TOTAL INCOME 61, , , , Net insurance benefits and claims 45, , , , Claims paid and change in insurance provisions 46, , , , Reinsurers' share -1, , Fee and commission expenses and expenses from financial service activities Expenses from subsidiaries, associated companies and joint ventures Expenses from other financial instruments and land and buildings (investment properties) 2, , Acquisition and administration costs 7, , , , Other expenses 1, , TOTAL EXPENSES 57, , , ,525.8 EARNINGS BEFORE TAXES 3, , Income taxes 1, EARNINGS AFTER TAXES 2, , RESULT OF DISCONTINUED OPERATIONS CONSOLIDATED RESULT OF THE PERIOD 2, , Result of the period attributable to the Group 2, , Result of the period attributable to minority interests