9M08 Results. Alive and kickin. New threats, new challenges Same team, same beliefs

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1 9M08 Results Alive and kickin New threats, new challenges Same team, same beliefs Milan, November 13 th, 2008

2 9M08 Results Summary 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 2

3 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 3

4 9M08 Highlights Alive and kickin Total net inflows in 9M08 including assets under custody and liquidity: 124 million Outflows from funds of 8 million (outflows of 98 billion at industry level in 9M08) AuM at 13.4 billion, down 10.3% vs. the end of 2007 due to the negative equity markets Recruitment of new FAs with 112 gross additions in 9M08 in both networks Total revenues closed at million (vs million in 9M07), with net profit of 36.3 million down vs million in 9M07, due to the very low level of variable management fees earned in the quarter ( 5.8 million vs million in 9M07) The new fund Formula 1 Alpha Plus Formula 1 Alpha Plus collected during its first days of placement (last week of September) million. At the beginning of November it increased AuM well in excess of 500 million 4

5 9M08 Highlights A snapshot from the past Crisis affect short-term economics, but not growth drivers (FAs and clients) FAs Clients (000) M08 AuM m M ,0% 1,5% 1,0% 0,5% 0,0% M08 Op. profit/ avg. AuM M08 5

6 9M08 Highlights Distribution Recruitment as a non cyclical growth driver The two networks continue to attract professionals 9M08 gross 2007 gross 2006 gross additions additions additions Azimut Consulenza AZ Investimenti Total PF at PF at PF at Azimut Consulenza AZ Investimenti Total

7 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 7

8 Mutual fund breakdown by underlying assets Broadly stable equity exposure vs. end June 2008 (was 40.8%) Industry Azimut Total Equity 20.2% Total Equity 39.7% Other 4.5% Italian eq. 3.7% Gov.t Bonds 59.6% Foreign Eq. 16.5% Ital. Bonds 3.7% For. Bonds 16.5% Italian eq. 8.2% Other 10.7% Foreign Eq. 31.5% Gov.t Bonds 47.8% Ital./ For. Bonds 1.7% Source: Company data / Assogestioni / Il Sole 24 ore - data as at

9 Funds breakdown by category 30 th September 2008 Industry (%) Azimut (%) 6,6 18,4 3,2 11,2 7,1 8,0 20,7 6,7 12,3 37,3 4,6 Cash Bond Balanced Flexible Equity Hedge 63,9 Cash Bond Balanced Flexible Equity Hedge Source: Company data/ Assogestioni 9

10 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 10

11 Distribution Funds net inflows as a % of total managed assets Azimut Italian Funds Industry 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% Source: Company out of Assogestioni monthly figures. Dotted line: Assogestioni reclassified quarterly figures 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% 11 jan-03 Feb-03 Mar-03 Apr-03 may-03 jun-03 jul-03 aug-03 sep-03 oct-03 Nov-03 dec-03 jan-04 Feb-04 Mar-04 Apr-04 may-04 jun-04 jul-04 aug-04 sep-04 oct-04 Nov-04 dec-04 jan-05 Feb-05 Mar-05 Apr-05 may-05 jun-05 jul-05 aug-05 sep-05 oct-05 Nov-05 dec-05 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

12 Distribution Funds net inflows as a % of total managed assets by Group 5% 0% -5% -10% -15% -20% -25% -30% -35% Source: Company out of Assogestioni monthly figures. 12 MEDIOLANUM GRUPPO GENERALI BPM AZIMUT JP MORGAN ANIMA UBI BANCA CRED.EMIL. MPS BNP PARIBAS PIONEER ALLIANZ INTESA S.P. ARCA KAIROS DEUTSCHE B. CR.AGRICOLE B.POPOLARE

13 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 13

14 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 Entry commission income Recurring fees Variable management fees Other income Insurance revenues Total Revenues Distribution costs Commissions on no load products Personnel and SG&A Depreciation, amort./provisions Operating Costs Operating Profit 1Q08 1,631 60,995 1,125 1,763 3,408 68,922-39,160-4,913-11,185-0,354-55,612 13,311 2Q08 0,838 60,176 4,003 1,508 3,356 69,881-37,602-4,844-12,055-0,219-54,720 15,160 3Q08 0,876 55,773 0,698 1,702 3,017 62,066-33,831-5,028-11,110-0,391-50,360 11,706 3Q07 2,047 59,966 8,225 1,033 3,798 75,069-34,901-5,357-9,179-0,461-49,898 25,171 Operating profit excl. variable fees 12,186 11,158 11,008 16,946 Recurring operating profit excluding variable fees remained stable from 2Q08 in spite of lower AuM due to negative market effect 14

15 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 Operating Profit Income from financial operations Net non recurring profits Interest expenses Profit Before Tax Income tax Deferred tax Consolidated Net Profit Minorities Net Profit 1Q08 13,311 2,253-0,470-1,357 13,737-0,917-0,067 12,754-12,754 2Q08 15,160 0,911-0,100-3,067 12,905-1,674 1,050 12,281-12,281 3Q08 11,706 0,682 2,058-3,403 11,043-0,558 0,821 11,306-11,306 Also net profit is stable across quarters, and the difference with the 3Q07 is quite exclusively due to the lack of variable management fees 3Q07 25,171 1,393-0,399-1,059 25,105-5,179-0,910 19,016-0,122 18,894 15

16 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 Entry commission income Recurring fees Variable management fees Other income Insurance revenues Total Revenues Distribution costs Commissions on no load products Personnel and SG&A Depreciation, amort./provisions Operating Costs Operating Profit 9M08 3, ,944 5,826 4,973 9, , ,593-14,785-34,350-0, ,692 40,177 % 9M , ,576 57,688 3,519 11, , ,217-13,181-28,274-1, , , , ,654 72,412 5,384 15, , ,814-17,738-39,345-4, , ,208 16

17 Consolidated reclassified income statement IAS/IFRS compliant Data in 000 Operating Profit Income from financial operations Net non recurring profits Interest expenses Profit Before Tax Income tax Deferred tax Consolidated Net Profit Minorities Net Profit 9M08 % 40,177 3,846 1,488-7,827 37,684-3,148 1,804 36,340-36, n.r. n.r n.r n.r M07 108,858 4,414-0,599-3, ,292-18,133-4,426 86,733-1,760 84, ,208 6,913-1,562-4, ,116-25,034-3, ,503-1, ,743 Effective tax rate 8.4% 16.6% 18.5% 17

18 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 (222,651) (200,000) (22,651) - - (222,651) 123,238 (99,413) Net financial position at the end of September 2008 reflects: 19.7m for dividends paid on 2 nd May m for buyback of treasury shares in 9M08 6m taxes paid in June m cashed in for the capital increase 18m cashed in for the sale of shares for the FAs stock options (222,417) (200,000) (22,417) - - (222,417) 125,835 (96,582) (21,955) - (21,955) (95,402) (95,402) (117,357) 135,725 18,368 18

19 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials Outlook About Azimut 19

20 Outlook As in the past crisis, what you see is what you get Here we go again We discussed what happened to our company in the period , and now we want to remind you what we said back in those periods: June 2002: February 2003: This market needs a psychiatrist Time to invest in equities If 2002 markets needed a psychiatric help, now over compressed and depressed valuations suggest that today s markets need some Prozac When at some stage fundamentals will matter again, we ll be ready to take advantage of the recovery much more than competitors. 20

21 Outlook cause we ve already been there, done that Seasons will change, winter to spring In the period our WAP was negative by around 20%, nevertheless Azimut ranked* 1 st among medium-large AMs in Italy in 2003, 2004, 2005 and July 2003: AZM IND RFR ,20% 11,04% 3,76% ,96% 9,39% 2,80% ,41% -4,39% 3,53% ,04% -6,09% 4,20% ,88% -6,50% 3,15% ,45% 2,36% 2,11% ,03% 2,74% 1,83% ,89% 5,30% 1,80% Funds are pinned by Stock Exchanges, but let s talk about this in 2-3 years time ,46% 3,01% 2,46% ,33% 1,29% 3,52% Source: Bloomberg for risk free ITGCBOTG Index, net of 12.5% withholding tax and FIDMGEND Index for Italian AM Industry It takes a strong belief in the mission of an asset manager, which is to create value for clients in excess of the risk-free over the medium term, and a little bit of braveness when rationality melts down. * Source: Money Mate. Sample of Italian AMs with AuM in excess of 5bn 21

22 Outlook and we give the same advise to clients backed by figures and we ll keep an overweight in equities versus competition In the same way we are currently advising client to return to equities for their long term savings and for net new money AZM WAP IND WAP NET RFR Source: Bloomberg for risk free ITGCBOTG Index, net of 12.5% withholding tax and FIDMGEND Index for Italian AM Industry Simulation based on 100 invested at the end of 2002, with reinvestment of all profits in the following year 22

23 Outlook and what someone sees as our weakness is our competitive advantage Consistent approach to new challenges and threats, brought by the same people and strong beliefs Getting the trust from our clients in the darkest hours leveraging on our reputation: the market cycles haven t t changed since 2001 and in Azimut people remained the same. We have retained all PMs that helped to overcome the past crisis and added many new AM competences since then (Quants, Hedge, Multimanager). We focus on cost control, nevertheless investments have been made and not delayed, to increase capacity, expertise, adding new competitive edge. At the same time we see competitors repeating the same mistakes: heavily switching clients to money market products, blaming the markets for something they should be able to understand. To sum up: resisting irrational behaviour due to short-term market turbulence and panic to please short-term appetites by clients, shareholders, financial agents will only help Azimut to improve its reputation. And just as a reminder, we are shareholders until 65 years old we are shareholders until 65 years old and unlike others we cannot sell our shares till then. No doubt that we strongly believe in a long term approach. 23

24 Outlook The pillars of our growth ,897 13,355 13,281 11,052 8,221 7,001 6,434 5, M08 Performance Net inflows 24

25 9M08 Results 9M08 Highlights Asset Management Distribution 9M08 Financials About Azimut Contacts 25

26 The Group structure Azimut Holding (Listed: AZM.IM) 100.0% Hedge funds Azimut CM (2004) 100.0% Mutual funds AZ Fund (1999) 100.0% Life insurances AZ Life (2003) 100.0% Distribution Monobrand Azimut Consulenza (1988) 100.0% Trustee Azimut Fiduc. (2007) 1.0bn 8.6bn 0.9bn 1,080 promotori % 20.0% AZ CM (2007) 0.1bn IN Alternative (2007) 0.1bn 100.0% Azimut Sgr (1986) 2.7bn 100.0% 15.0% 50.0% Multibrand AZ Investimenti (2005) 175 promotori Multibrand Apogeo Consulting* (2008) Multibrand Open Family Office (2008) Data at *under authorisation 26

27 AuM growth Net inflows and market performance % ,001 +5% +12% 8,221 CAGR +20.6% +6% +13% 11, % +24% 13,281 +5% +15% 14, % Performance Net inflows Source: Company data 27

28 A consolidated growth Assets under management Financial Agents CAGR +16.8% CAGR +10.2% Source: Company data 28

29 Azimut s history 1988: Azimut is established by Akros Finanziaria SpA : Pietro Giuliani and most of the current top management of Azimut join the company and start the recruitment of top level professionals for the distribution network (organised in 6 regional companies) and the fund managers team. Azimut Holding 20.0% Azimut Piemonte 80.0% 20.0% Azimut Lombardia 80.0% 80% 20.0% Azimut Triveneto 80.0% Promotori 1998: Bipop-Carire acquires Azimut, which continues to operate independently 20% Azimut Liguria-Toscana Azimut Adriatica Azimut Centro-sud December 2001: as a result of the Bipop restructuring, Azimut s management buys-out the business. Approximately 700 people invested in the MBO, completed by June December 2002: The 6 regional distribution companies merged into Azimut Consulenza SIM 2004: Azimut s IPO 20.0% 80.0% Azimut Holding 100.0% Azimut Consulenza SIM 65.0% 35.0% 20.0% 80.0% Apax Management and Promotori 20.0% 80.0% 29

30 Azimut s shareholders Total shares issued: 142.8m Treasury shares: 7.5% of share capital Free float 76.65% TIMONE 23.35% Timone Fiduciaria represents the shares of around 800 individual shareholders (Promotori, employees, managers working for Azimut), tied up in a strong shareholders agreement. Free float breakdown Others 48.77% HENDERSON, 4.97 BANCO POPOLARE, 4.48 AZIMUT HOLDING, 7.50 SCHRODER, 3.68 SEB INVEST. MNGMT, 2.71 ALLIANZ, 2.39 CAPITAL RESEARCH, 2.15 Source: Consob, Bloomberg 30

31 The shareholders agreement A strong agreement for a long term commitment Participants Promotori, employees and management organised in separate areas Duration 3 years automatically renewed unless the absolute majority of the voting rights refuses Share lock-up Governance New shares 75% of each participant s shares are locked until being 65 years old, regardless of the tenure within the Group The residual 25% can be sold at any time but subject to pre-emption right amongst other participants. The price for this transfer is a 30 days rolling average. A share trust includes 100% of the voting rights of the participants. An 11 member committee is responsible for managing and monitoring the participants obligations and rights under the agreement Stock option plans are subject to the acceptance of this agreement 31

32 Historical weighted average performance (WAP) 2007: A difficult year, but sticking to our investment style 10 years of performance... On average 170bps above the risk-free and 300bps above the industry 25% AZM IND RFR 20% 15% 10% 5% 0% -5% -10% -15% Source: Bloomberg for risk free ITGCBOTG Index, net of 12.5% withholding tax and FIDMGEND Index for Italian AM Industry 32

33 A history of overperformance Figures back Azimut s strong performance over the medium/long term Azimut overperformance is not affected by short-term modest results bps 35 AZM overperformance vs. industry 1-3-5ys bps 17 Industry well below net risk free ys 10-8 bps AZM overperformance vs. net risk free 1-3-5ys ys ys ys of returns AZM IND RFR ,20% 11,04% 3,76% ,96% 9,39% 2,80% ,41% -4,39% 3,53% ,04% -6,09% 4,20% ,88% -6,50% 3,15% ,45% 2,36% 2,11% ,03% 2,74% 1,83% ,89% 5,30% 1,80% ,46% 3,01% 2,46% ,33% 1,29% 3,52% Source: Bloomberg for risk free ITGCBOTG Index, net of 12.5% withholding tax and FIDMGEND Index for Italian AM Industry Simulation based on 100 invested at the end of 1997, with reinvestment of all profits in the following year 33

34 Consolidation doesn t stop the industry s meltdown Concentration of Top 20 players in Italian AM industry by market share 100% 90% 80% 70% Dec-02 Mar-08 dec-02 mar-08 Top % 57.5% Top % 72.9% Top % 90.2% Other (#) Azimut 1.19% 2.74% 60% 50% 40% 30% 20% 10% 0% In spite of several mergers over the past 5 years the industry in Italy continues to be extremely fragmented, with the overall number of players increasing Largest players experience a continued shrinking of their market share; acquisitions only helped some of them to reduce the decline Azimut doubled its market share, still being a small player with plenty of room to grow; it s by far the largest Italian independent AM Source: Company data out of Assogestioni 34

35 After 4 ys of bull market, PFs network still losing people The promotori job market didn t grow as usual in positive environment Growth in number of financial advisors December 2006 / December % 20% 10% 0% Avg. -3.1% -10% -20% -30% -40% Source: Assoreti 20 largest networks data as at December 31st 2006 and MEDIOLANUM AZIMUT CONS. SANPAOLO INV. FIDEURAM FIN.& FUTURO BIPIELLE NET UBI SIM MPS B.PERS. UNIPOL CREDEM SIMGENIA B.SARA D.RETE XELION FINECOBANK B. LOMBARDA B.SAI EUROMOBILIARE ALLIANZBANK B.GENERALI AXA

36 More selective environment Retaining experienced professionals a key factor for sustainable growth -3% -8% -13% -18% -23% -28% -33% -38% 36 AZIMUT CONS. FIDEURAM SANPAOLO INV. MEDIOLANUM FIN. & FUTURO XELION B.SAI EUROMOBILIARE FINECOBANK SIMGENIA ALLIANZBANK UBI SIM B.SARA B.D. RETE BIPIELLE NET. MPS B.PERS. B. LOMBARDA P. CREDEM AXA B.GENERALI UNIPOL Turnover in number of financial advisors Avg. 12.1% Source: Assoreti 20 largest networks data as at December 31st 2007 turnover based on avg number of PF n.a. n.a.

37 Stable organic growth or extraordinary effort? Only five networks have better than average figures... The two dimensions of recruitment: growth and turnover 30% 26% 22% 18% 14% Avg. turnover -12.1% MEDIOLANUM 10% 6% 2% S.PAOLO INV. AZIMUT C. FIN&FUT. BPL NET. UBI SIM FIDEURAM -2% CREDEM MPS B.PERS. SIMGENIA -40% -35% -30% -25% -20% -15% -10% -5% 0% -6% Avg. Growth: -3.1% B.SARA B.D.RETE XELION B.LOMBARDA FINECO B.SAI -10% ALLIANZBANK EUROMOBILIARE -14% -18% -22% -26% -30% AXA Source: Assoreti 20 largest networks data as at December 31st 2007 turnover based on avg number of PF 37

38 Quality vs. Quantity but only for one of them growth is meant to add value Managed assets inflows and AuM per promotore December 2007 CREDIT SUISSE B.FIDEURAM XELION Avg. Net inflows per PF: -28k EUROMOBILIARE FIN. & FUT SANPAOLO INV. Avg. Aum per PF 7.2m B.GENERALI 6000 ALLIANZBANK MEDIOLANUM FINECO B.SARA B.D.RETE 4000 UBI AXA BPL NET MPS B.PERS CREDEM ZURICH Source: Assoreti 20 largest networks data as at December 31st 2007 based on avg number of PF AZIMUT C. 38

39 Clients and distribution network AuM s segmentation Geographic distribution of agents Affluent 31.4% HNWI 43.8% Smaller wealth 1.6% (1) Customers segmentation based on AuM volumes: Smaller Wealth below Euro 12,500; Medium Wealth from Euro 12,500 to Euro 125,000; Affluent from Euro 125,000 to Euro 500,000; HNWI (High net worth individuals) above Euro 500,000 (2) Including Sardinia Medium wealth 23.2% % of Promotori North 73.8% Centre (2) 21.5% South 4.7%

40 CONTACTS Fabrizio Armone tel Gabriele Blei tel Disclaimer 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. 40