2008 FY Results happens, now let s move forward

Transcription

1 2008 FY Results 2008 happens, now let s move forward Milan, March 12 th 2009

2 2008 Results Summary 2008 Highlights Asset Management Distribution 2008 Financials Outlook 2

3 2008 Results 2008 Highlights Asset Management Distribution 2008 Financials Outlook 3

4 2008 Highlights Net inflows into managed assets were almost at break-even with a negative figure of 107 million (equal to 0.7% of initial AuM), more than offset by inflows into non-managed assets, positive by 186 million. The industry lost 140 billion, or 25% of initial AuM. Carried out a large buyback program throughout 2008 coupled with the earlier reimbursement of the convertible bond. 46 Senior Azimut people (top management, network managers, fund managers) at the beginning of 2009 increased their shareholdings in the Company by buying shares on the market. Recruitment of financial advisors at a sustained pace with 149 gross new hiring in the two networks, with a high quality and productivity. Ongoing clean-up in both networks to further improve the standards and efficiency. Total revenues closed at million (vs million in 2007), with net profit of 42.0 million down vs million in 2007, due to the very low level of variable management fees earned in 2008 ( 6.8 million vs million in 2007). 4

5 2008 Highlights 2008 happens, but let s not forget what we are (or not) THIS IS AZIMUT: A really sustainable business model, as figures demonstrate also in tough times. THIS IS NOT AZIMUT: An asset manager with huge outflows undermining the PMs activity; An insurance company with toxic securities in the portfolio and potential demographic risk; A hedge fund using gates and side pockets to cope with clients redemptions; A bank with the need to improve its capital ratios; A distribution network desperately searching for its own identity. But Azimut is a Financial Group built upon the integration of asset management and distribution, which continues to develop, manage and distribute mutual and hedge funds, life insurance products leveraging on its reputation to grow in the domestic market while exploring opportunities on international markets. And just because the issues linked with the is not are more than those coupled with the is let s not forget the real situation 5

6 2008 Highlights P&L at a glance Would you change a 20-years old business model after a one-of-its-kind year? Recurrent revenues cover all costs, including development and recruitment of FAs m 350 TOTAL REVENUES Variable management fees Other revenues TOTAL REVENUES Variable management fees 15.7 Insurance Revenues Other revenues Insurance Revenues TOTAL COSTS TOTAL COSTS Recurrent fees Recurrent fees Total costs Total costs

7 2008 Highlights Would you change a 20-years old business model after a one-of-its-kind year? 2008 happens, but once in 200 years according to statistical models 2008, an undoubted exceptional year, but 30% CHART TAKEN FROM IPO PRESENTATION Analysing again the Monte Carlo simulation performed at the IPO time concerning repeatability of Azimut s variable management fees, we underline that the likelihood of virtually zero fees is less than 0.5%. Combined likelihood of two similar years in a row is therefore even closer to zero. This system applies to Luxembourg domiciled funds, thus with a more efficient fiscal treatment. Main assumptions of Monte Carlo simulation: Normally distributed returns with a mean of 7% Volatility of 15% per annum 10,000 iterations 10 years horizon (divided in 120 monthly periods) Analysis related to Azimut equity/flexible funds (ca. 70% of total AuM) Assuming conservatively a coefficient of 0.006% as previously described Likelihood 25% 20% 15% 10% 5% 0% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% More Variable Management Fees/AuM 7

8 2008 Results 2008 Highlights Asset Management Distribution 2008 Financials Outlook 8

9 Mutual fund breakdown by underlying assets Industry Azimut Total Equity 13.0% Total Equity 27.5% Italian eq. 2.4% Other 5.5% Gov.t Bonds 61.0% Foreign Eq. 10.6% Ital. Bonds 3.5% For. Bonds 17.0% Italian eq. 8.6% Other 16.7% Net equity exposure on March 10 th, 2009 is down to 21.5%. Foreign Eq. 18.9% Ital./ For. Bonds 1.2% Source: Company data / Assogestioni / Il Sole 24 ore - data as at Gov.t Bonds 53.6% 9

10 Funds breakdown by category Switches during 2008 Industry (%) Azimut (%) 100% 90% 80% 6,4 5,3 23,7 17,1 100% 90% 80% 7,3 4,5 10,4 2,5 70% 12,9 70% 60% 50% 40% 30% 20% 10% 0% 11,7 4,6 5,9 39,0 35,8 16,5 21, CASH BOND BALANCED FLEXIBLE EQUITY HEDGE 60% 50% 40% 30% 20% 10% 0% 70,6 63,7 5,0 6,7 9,6 8,5 8,7 2, CASH BOND BALANCED FLEXIBLE EQUITY HEDGE Source: Company data/ Assogestioni 10

11 Funds breakdown by category How really flexible are Azimut s mutual funds? Maximum equity exposure according to prospectus % on max max equity AuM in AuM equity / AuM TOTAL ITALY-DOMICILED FUNDS 2,061,237, % 52.8% 11.0% TOTAL LUXEMBOURG-DOMICILED FUNDS 7,863,585, % 44.9% 35.6% TOTAL MUTUAL FUNDS 9,924,823, % 46.6% Current equity exposure underlying our mutual funds can double even if the product mix remains the same as it is today, without the typical inertia in the change of the asset allocation due to clients and distributors. 80% of the AuM is in Luxembourg funds, which also have a better reactivity to market performance in terms of variable management fees. Source: Company data as at February 27,

12 2008 Results 2008 Highlights Asset Management Distribution 2008 Financials Outlook 12

13 2008 Highlights Distribution 186m in non managed assets offset 107m outflows from managed assets No panic selling, but escape towards liquidity and government bonds m Managed assets Non managed assets jan feb mar apr may jun jul aug sep oct nov dec 08FY Source: Company data in m 13

14 Distribution - Funds Funds net inflows as a % of total managed assets Azimut Italian Funds Industry 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Source: Company out of Assogestioni monthly figures. Dotted line: Assogestioni reclassified quarterly figures 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% 14 jan-06 feb-06 mar-06 apr-06 may-06 jun-06 jul-06 aug-06 sep-06 oct-06 nov-06 dec-06 jan-07 feb-07 mar-07 apr-07 may-07 jun-07 jul-07 aug-07 sep-07 oct-07 nov-07 dec-07 jan-08 feb-08 mar-08 apr-08 may-08 jun-08 jul-08 aug-08 sep-08 oct-08 nov-08 dec-08

15 Distribution - Funds inflows; Top 10 players representing 68.2% of total AuM in funds* m Azimut 129 Generali Mediolanum Ubi BNP Par. Arca Mps B.Popolare Unicredit IntesaSP Source: Company out of Assogestioni monthly figures. *as at 31 December 2008 data in million Euro 15

16 Distribution - Funds endemic crisis for large players, opportunities for small and growth cos market share 2008 market share % Gruppo Intesa -21.3% S.Paolo IMI IntesaSP Unicredit Capitalia Unicredit -24.5% BPU B.Lombarda Ubi Arca Mps +22.5% +2.1% -15.9% -1.6% +9.6% Mediolanum BNP Par % Generali +44.3% Azimut -38.2% 32.3% 25.4% 21.4 % 16.1 % 4.7% 4.8% 4.7% 4.0% 3.9% 3.8% 2.4% 2.9% 2.6% 2.9% 2.0% 2.8% 1.9% 2.8% 4.3% 2.6% BPI BPVN B.Popolare Source: Company out of Assogestioni monthly figures. 16

17 Distribution Funds and SICAVs 2004: the main Italian distribution network asset allocation The main networks were mainly selling lower margin funds; Azimut was already differentiating itself LOW MARGINS 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% CREDIT SUISSE UBI CREDEM BANCA SARA 2004 avg. Equity & Flexible Mutual Funds 39% B. GENERALI GROUP BANCA SAI MPS FINECO BANCA NETWORK B. EUROM. SANPAOLO INVEST B. FIDEURAM AZIMUT GROUP 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LOW MARGINS 2004 avg. Bond & MM Mutual Funds 51% Source: Company out of Assoreti 2004 data not available for Allianzbank, Mediolanum and Finanza & Futuro 17

18 Distribution - Funds and SICAVs cumulated total inflows into mutual funds by category 5 years of inflows led to a worsening of the mix and profitability of FAs portfolios equity balanced bonds cash flexible other break-even point bn 0.8bn 0.7bn 0.6bn 0.5bn 0.4bn 0.2bn 0.1bn 0.0bn -0.1bn -0.1bn -0.4bn -0.5bn -0.8bn -1.8bn -2.8bn AZIMUT GROUP FINECOBANK MPS B.PERSONALE CREDEM BANCA SARA UBI BANCA PRIVATE SANPAOLO INVEST B. FIDEURAM FINANZA & FUTURO BANCA NETWORK INV. BANCA SAI B.MEDIOLANUM CREDIT SUISSE B. EUROMOBILIARE ALLIANZ BANK B. GENERALI GROUP Source: Company out of Assoreti; cumulated net inflows

19 Distribution Funds and SICAVs 2008: the main Italian distribution network asset allocation 4 years later the FA s asset mix and profitability has decreased; Azimut s strategy improved both LOW MARGINS 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% CREDIT SUISSE 2008 avg. Equity & Flexible Mutual Funds 38% BANCA SARA FINECO MPS BANCA NETWORK BANCA SAI B. EUROMOBILIARE UBI SANPAOLO INVEST B. FIDEURAM CREDEM FINANZA & FUTURO MEDIOLANUM AZIMUT GROUP 2008 avg. Bond & MM Mutual Funds 52% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LOW MARGINS Source: Company out of Assoreti 2008 not available for Banca Generali Group 19

20 2008 Results 2008 Highlights Asset Management Distribution 2008 Financials Outlook 20

21 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 1Q08 2Q08 3Q08 4Q Entry commission income Recurring fees Variable management fees Other income Insurance revenues 1,631 60,995 1,125 1,764 3,408 0,838 60,176 4,003 1,507 3,356 0,876 55,773 0,698 1,702 3,017 1,499 47,713 0,967 2,274 2,962 4, ,657 6,793 7,246 12,743 11, ,654 72,412 5,384 15,658 Total Revenues 68,923 69,880 62,066 55, , ,545 Distribution costs Commissions on no load products Personnel and SG&A Depreciation, amort./provisions Operating Costs Operating Profit -39,160-4,913-11,185-0,354-55,612 13,311-37,602-4,844-12,055-0,219-54,720 15,160-33,831-5,028-11,110-0,391-50,360 11,706-32,336-3,888-11,467-0,565-48,257 7, ,929-18,673-45,818-1, ,949 47, ,814-17,738-39,345-4, , ,208 21

22 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 1Q08 2Q08 3Q08 4Q Operating Profit 13,311 15,160 11,706 7,158 47, ,208 Income from financial operations Net non operating costs Interest expenses 2,253-0,470-1,357 0,911-0,100-3,067 0,682 2,058-3,403 1,570-2,027-3,659 5,416-0,538-11,486 6,913-1,562-4,443 Profit Before Tax 13,737 12,905 11,042 3,042 40, ,116 Income tax Deferred tax Consolidated Net Profit Minorities Net Profit -0,916-0,067 12,754-12,754-1,674 1,050 12,280-12,280-0,558 0,821 11,305-11,305-0,946 3,545 5,641-5,641-4,094 5,349 41,981-41,981-25,034-3, ,503-1, ,743 22

23 Focus on Personnel and SG&A IAS/IFRS compliant Data in % YoY Personnel and SG&A 45,818 39, % One-off items and step variable costs 2,759 Development of AZ Fund Management 0,732 Net Personnel and SG&A 42,327 39, % Almost 50% of the increase in personnel and SG&A cost is related to one-off items and step variable costs incurred during 2008 mainly related to the spin-off operations (back office and IT), regulatory requirements (MiFID) and investment in the Luxembourg-based operations. Net of the abovementioned items, cost growth is in line with the Group run-rate and is below the 10% annual growth announced in July 2004 at the time of the IPO. The actions that will be put in place over the next three years will contain the 8% net personnel and SG&A annual cost growth, leading to a cumulated cost saving of around 25% over the same period of time. 23

24 Consolidated net financial position IAS/IFRS compliant Data in 000 Amounts due to banks: Senior Loan Trademark lease-back Securities issued: Convertible bond TOTAL DEBT Cash and cash equivalents NET FINANCIAL POSITION (222,130) (203,297) (18,833) Net financial position at the end of December 2008 reflects: 19.7m for dividends paid on 2 nd May m for buyback of treasury shares in m taxes paid during m cashed in for the capital increase 18.2m cashed in for the sale of shares for the FAs stock options - - (222,130) 115,217 (106,913) (222,651) (200,000) (22,651) - - (222,651) 123,238 (99,413) (21,955) - (21,955) (95,402) (95,402) (117,357) 135,725 18,368 24

25 2008 Results 2008 Highlights Asset Management Distribution 2008 Financials Outlook 25

26 Outlook Ready for even tougher times, but without losing our mind and long-term perspective Azimut s way to resist for the remaining part of this crisis As already happened in the period we will freeze fixed costs if markets will continue to be negative; in fact, even if we do not subscribe to the global financial meltdown scenario, we cannot rule out the possibility of a prolonged period of low variable fees environment, even though this has a low likelihood and we have to be prepared for the case This means that Azimut will block new staff hirings (thus not cutting the staff), introducing also an internal job rotation: from useful to necessary jobs in order to sustain the growth We recruited new resources in the PM team in 2008, and we will NOT change it since it will be fit for future growth which will eventually arrive. Current PM team (which represents 25% of total Group s staff) can manage assets 7 to 10 times the current size In the same way we will NOT stop recruiting FAs: would you expect a manufacturer to stop purchasing materials if demand for products is still there? And as usual, in order to foster the demand, we will continue to innovate. Last product launch is F1 Dynamic trading; a 150/50 mutual fund not correlated to equity or bond markets which not only can adopt a long/short strategy for equities, but also active trading with derivatives on different asset classes (commodities, currencies ) in order to take advantage of short term unbalances 26

27 CONTACTS Fabrizio Armone tel Gabriele Blei tel Disclaimer Safe harbour statement This document has been issued by Azimut Holding just for information purposes. No reliance may be placed for any purposes whatsoever on the information contained in this document, or on its completeness, accuracy or fairness. Although care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been verified by independent auditors, third parties and the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company, or any of its members, directors, officers or employees or any other person. The Company and its subsidiaries, or any of their respective members, directors, officers or employees nor any other person acting on behalf of the Company accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information in this document might include forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. No one undertakes to publicly update or revise any such forward-looking statement. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. Any forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any shares and/or investment products mentioned and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations. 27