GENERALI GROUP 9M 2014 Results

Transcription

1 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).

2 2 Agenda - Profit & Loss and Balance Sheet Page 3 - Business review Page 9 - Backup Page 24

3 3 Agenda I. Profit & Loss and Balance Sheet

4 Profit & Loss Key 9M 2014 financials at a glance 4 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, % 964 1, % Operating RoE (2) 9.5% 10.9% +1.4%pts. 2.7% 3.5% +0.8%pts. Net result ( m) 1,591 1, % % EPS ( ) % % Net operating EPS ( ) % % Shareholders equity (3) 19,778 22, % Solvency I (3) 141% 160% +19%pts. (1) On like for like basis (2) Not annualized (3) Comparative data FY13

5 Profit & Loss Operating result by segment 5 ( m) +12.8% 3, (27) 11 3,677 9M13 LIFE P&C FINANCIAL SERVICES HOLDING EXP. CONS.AD 9M14 9M14 2,300 1, (290) (137) 9M13 2,071 1, (264) (148) D +11.0% +11.8% +17.8% +10.2% -7.4%

6 Profit & Loss From operating result to net profit 6 ( m) 3,677 Including: m: VOBA amortization (7) (606) (299) Including: m: Interest costs (996) (19) (161) 1,588 OPERATING RESULT NON OPER. INVESTMENT INCOME NON OPER. HOLDING EXPENSES NET OTHER NON OPER. EXPENSES INCOME TAXES DISC. OPERATIONS MINORITIES NET RESULT 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 % -0.1%

7 Balance Sheet Shareholders equity 7 Shareholders equity rollforward ( m) +14.0% 3,177 1,588 22,538 19,778 (701) (1,304) Including: m: GPH buyout m: GDH squeeze out m: defined benefit plan SHAREHOLDERS' EQUITY FY13 Δ in AFS RESERVE 9M 2014 NET RESULTS DIVIDEND OTHER SHAREHOLDERS EQUITY 9M14 Change in AFS reserve ( m) 3, ,678 2,501 (262) AFS RESERVE FY13 IMPACT EQUITY INVESTMENT IMPACT BOND INVESTMENTS OTHER AFS RESERVE 9M14

8 Capital Solvency I Solvency I rollforward (%) 8 Significant improvement of Solvency capital position despite the impact of remaining GPH minorities acquisition, driven by: Result of the period Successful placement of subordinated bond Solvency I ratio sensitivities (%) Total ratio Financial market development Impact of BSI disposal (+9%pts.) expected to close by 1H15 +19%pts. 15%pts 160% 141% 10%pts. 5%pts (3%pts.) (8%pts.) Equities -30% Interest rate +100bps Interest rate - 100bps Credit spread + 100bps Real estate -10% 156 SOLVENCY I FY13 REQUIRED MARGIN GROWTH M&A (1) CONSOLIDATED RESULT SUBORDINATED DEBT FINANCIAL MARKETS AND OTHER 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

9 9 Agenda II. Business review

10 Life Insurance Life key financial indicators 10 ( m) 9M13 9M14 LFL D 3Q13 3Q14 LFL D Gross written premiums 32,801 35, % 9,685 11, % Net inflows 6,515 9, % 1,580 3, % Life operating result 2,071 2, % % Life operating ratio on investments (bps) (1) APE 3,211 3, % 908 1, % New Business Value % % Margins on APE (%) 20.9% 25.5% +5.3% 21.7% 24.7% +3.3% (1) Not annualized

11 Life Insurance Life Operating result by driver 11 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% 2, ,300 ( m) (190) 9M13 TECHNICAL MARGIN INVESTMENT RESULT EXPENSES 9M14 9M14 4,026 1,705 (3,430) 9M13 4,216 1,491 (3,636) D % -4.5% +14.3% -5.7%

12 Life Insurance Life inflows and technical reserves (1) 12 Sharp increase in net inflows (+ 41.7%) Excellent performance in Italy and EMEA Life Inflows ( m) 9M13 9M14 Italy 788 3,652 France Germany 3,635 2,183 CEE EMEA 1,174 2,194 ( bn) Recovery in France in 3 rd 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% (3.9) % Lat. Am Asia International % TOTAL 6,515 9,118 FY13 NET INFLOWS LOADINGS, RISK & SURRENDER RESULT POLICYH. SHARE OF INVEST. RESULT EXCHANGE RATES & OTHER 9M14 (1) Including liabilities related to investment contracts Unit linked Traditional

13 Life Insurance Life investment performance 13 Life segment general account (%) Current returns (not annualized) Euro bn Euro bn 1.9% 1.7% 3.8% 2.3% 3.2% 3.5% 4.1% 4.7% 8.9% 8.1% Other Cash & cash equivalent Real estate Fixed income Euro m % 9M13 6, M14 7, % 35.0% 43.3% 44.9% Equity Other fixed income Corporate bonds Government bonds 9M Equity 9M Real Estate (1) 9M M Total (1) 9M13 7, M14 8, FY13 9M14 (1) Net of depreciation expenses

14 Life Insurance Life new business analysis 14 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 9M13 9M14 LFL r Italy 1,235 1, % % 17.8% 27.8% +10.1% France % % 13.2% 12.2% -0.9% Germany % % 24.9% 32.1% +7.2% CEE % % 44.5% 31.9% -4.7% EMEA % % 25.7% 27.4% +2.2% Lat. Am & Asia % % 22.6% 13.3% +3.7% Total 3,211 3, % % 20.9% 25.5% +5.3%

15 P&C Insurance P&C key financial Indicators 15 ( m) 9M13 9M14 LFL D 3Q13 3Q14 LFL D Gross written premiums, of which: Primary Motor Primary Non Motor 15,915 6,549 8,827 15,564 6,319 8, % +0.2% +0.0% 4,439 1,857 2,422 4,395 1,803 2, % +0.3% +2.4% Combined ratio (%) 95.0% 93.6% -1.4%pts. 95.8% 95.0% -0.7%pts. Of which: Nat Cat impact (%) 2.5% 1.2% -1.3%pts. 3.5% 1.0% -2.5%pts. P&C operating result 1,325 1, % %

16 P&C Insurance P&C Operating result by driver 16 Improving result reflecting better underwriting margins +11.8% ( m) 1, (9) 1,482 9M13 TECHNICAL MARGIN INVESTMENT RESULT OTHER 9M14 9M (147) 9M (139) D % +21.6% +1.7% +6.2%

17 P&C Insurance P&C gross written premiums trends 17 ( m) 9M13 9M14 LFL r Italy 4,304 4, % France 2,162 2, % Germany 2,804 2, % CEE 1,498 1, % EMEA 3,384 3, % 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) Lat Am % Asia % International % Total 15,915 15, %

18 P&C Insurance Combined ratio analysis 18 Combined ratio (%) - 1.4%pts. Administr. costs Expense ratio (%) - 0.1%pts (0.1) (0.0) (0.1) (1.4) Acquisition costs Δ%pts 9M13 Δ Admin Δ Acq. 9M14 Loss ratio (%) - 1.4%pts (0.3) (1.3) M13 Current year NAT CAT Prior years 9M14 9M13 Δ Expense ratio Δ Loss ratio 9M14 9M Loss ratio Expense ratio 9M

19 P&C Insurance Combined ratio by country 19 COUNTRY 9M13 9M14 Combined ratio improving in Italy, despite Nat Cat impact (+0.9%pts.) 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. 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) 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.

20 P&C Insurance P&C investment performance 20 P&C segment general account (%) Current returns (not annualized) Euro 37.7 bn Euro 39.7 bn 1.1% 1.5% 10.0% 8.7% Euro m % 13.1% 12.6% 9.9% 10.0% 6.5% 9.9% 30.2% 33.6% 29.1% 23.7% Other Cash & cash equivalent Real estate Equity Other fixed income Corporate bonds Government bonds 9M Fixed income 9M M Equity 9M Real Estate (1) 9M M Total (1) 9M13 1, M14 1, FY13 9M14 (1) Net of depreciation expenses.

21 Financial Segment Financial segment key financial indicators 21 9M13 9M14 LFL D 3Q13 3Q14 LFL D Operating result ( m) % % Net fees and commissions ( m) % % Cost / income ratio (%) 50.0% 47.3% -2.7%pts. 50.8% 47.4% -3.4%pts. Third party AUM (1) ( bn) % (1) Comparative data FY13

22 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

23 Liability Management transaction Liability Management transaction Key elements Overview: 23 Partial Cash Tender on 3 outstanding Hybrids: 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 Rationale: 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 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: Issuer Nominal value issued Currency Coupon % Issue date Maturity Call date Purchase price Generali Finance BV 1,275 m EUR June 2006 Perpetual 16 June % Generali Finance BV 700 m GBP June 2006 Perpetual 16 June % Generali Finance BV 1,250 m EUR February 2007 Perpetual 8 February % Tender Period: Thursday 6 th November to 5pm (CET) Thursday 13 th November Results: After pricing of the New Issue, which will follow the Tender Period and be no later than 21 st November Settlement: 5 business days after New Issue pricing for both the Cash Tender and New Issue

24 24 Agenda II. Backup - Investments Page 25 - Financial debt Page 30

25 25 Agenda II. Backup - Investments Page 25 - Financial debt Page 30

26 Investments Assets under management 26 Total portfolio 465 bn Breakdown by region and asset class 4% Italy By Region France 3% 10% 31% Germany 29% CEE General account 9.1% 23% EMEA Unit Linked 14.1% RoW and other operations Third party AUM 76.8% 3% 1% 4% 5% Equity Fixed income Real estate By Asset Class 87% Cash & Cash Equivalent Other

27 Investments 27 Fixed Income Portfolio Total Portfolio 312 bn Covered 31 bn Corporate 93 bn Government 155 bn (1) 1% 1% 1% 2% 0% 10.5% 10.0% 10% 7% 10% 4% 8% 14% 16.9% 12.9% 10% 71% 40% 37% 46% 34% Other fixed Income Covered AAA AA A BBB Not Investment Grade Not Rated 4% Corporate non fin. 49.7% Corporate fin. Government Fixed income duration FY13 9M14 Life P&C (1) Italian government bond exposure is 84% of BBB

28 Investments Equity & Equity-like 28 Alternative investments ( 2.7 bn) Total portfolio ( 17 bn) Equity ( 10.9 bn) 21% Life, P&C and Financial Life, P&C and Financial 1% 24% 14% 65% Life P&C 15% Life P&C 75% Financial 22% Financial 63% 24% 0% 76% Life, P&C and Financial Life P&C Equity Equity Funds Alternatives Listed and Unlisted Quoted Unquoted 17% 83% Financial

29 Investments 29 Real Estate (1) Total portfolio ( 25 bn (1) ) 4% 6% Breakdown by use (2) 11% Office Retail 15% 64% Residential Logistic Breakdown by utilization (2) Other/Mixed 15% Investment properties 1% Breakdown by country (2) Own use 20% Italy 85% 2% 16% 37% France Germany 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

30 30 Agenda II. Backup - Investments Page 25 - Financial debt Page 30

31 Financial debt 31 Debt refinancing operations completed Financing until 2016 call dates completed; 1 bn net reduction in debt levels by end 2015 ( bn) (0.5) 1.0 (1.5) 12.9 (0.8) 12.2 (0.5) 11.7 FY13 SENIOR BOND REPAYMENT SUB DEBT ISSUED JAN OF INELIGIBLE ISSUED MAY 2014 LOAN 2014 SENIOR DEBT REPAYMENT MAY M14 NOVEMBER 2014 SENIOR MATURITIES EXPECTED FY 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 1/3 rd 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)

32 Financial debt Focus on financial debt 32 Average cost & maturity of financial debt (%) Total financial debt ( m) FY13 9M14 12,758 m 12,956 m (1) Average cost (%) 5.93% 5.71% 7,612 8,133 Subordinated/Hybrid 6.54% 6.41% Senior 4.81% 4.26% 4,468 4,220 Average maturity (years) FY13 9M14 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

33 Financial debt Financial debt breakdown (1) by expiry date/call date 33 ( m) 2,635 2,177 1,750 1,268 1,250 1, Senior Hybrid 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.

34 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.

35 Next events Investor Day FY 2014 results reporting Annual General Meeting Q 2015 results reporting H 2015 results reporting M 2015 results reporting

36 36 Team Spencer Horgan Head of Investor & Rating Agency Relations Stefano Burrino Senior IR Manager Emanuele Marciante Senior IR Manager - Credit & Rating Agency Relations Emanuele.Marciante@Generali.com Veronica Cherini IR Manager Veronica.Cherini@Generali.com Marta Porczynska Team Assistant & Event Manager Marta.Porczynska@Generali.com Martina Vono Team Assistant & Event Manager Martina.Vono@Generali.com Assicurazioni Generali P.za Duca degli Abruzzi Trieste, Italy Fax: ir@generali.com Rodolfo Svara IR Manager Rodolfo.Svara@Generali.com

37 37 Thank you

38 GENERALI GROUP 9M 2014 Results