ASSET MANAGEMENT D. Frigerio Head of Private Banking & Asset Management Division
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 2
PRIVATE BANKING & ASSET MANAGEMENT DIVISION AT A GLANCE: A GLOBAL PROVIDER PRIVATE BANKING & ASSET MANAGEMENT DIVISION Total Assets incl. AuA Total Assets incl. Capitalia Market Coverage Asset Management ~290 bn ~330 bn Global Private Banking ~ 190 bn ~ 210 bn European UCI Lux. & Subs HVB Luxemburg PB AMG Data as per March 2007 3
WITH STRONG FINANCIAL RESULTS AND VALUE CREATION PROFIT&LOSS 2006 y/y% (eur mln) Total Revenues 2,398 15.2% Operating Income 1,072 32.5% Profit before Taxes 1,005 34.2% Cost/Income 55.3% -583 bps FY06 EVA Poland Markets 12% CEE 16% Retail 9% MIB 23% Corporate 19% PB & AM 21% y/y % ch. Retail +345 mln Corporate 69.1% Private & AM 40.9% MIB 55.1% CEE 70.7% Poland Markets 46.3% 4
PIONEER INVESTMENTS AT A GLANCE: LOCAL FOCUS BUT GLOBAL REACH present in 22 countries ~2,450 employees, thereof more than 300 investment professionals Chicago Omaha Boston New York Bermuda Miami London Dublin Prague Luxemburg Paris Madrid Bern Geneva & Zurich Hamburg Sofia Turin Warsaw Munich Budapest Bucharest Tel Aviv Vienna Zagreb Beijing Taipei Hong Kong Milan Singapore global investment hubs local investment hubs sales offices Sydney 5
A CONSISTENT BUSINESS MODEL ASSET MANAGEMENT DIVISION PRODUCTION CENTRAL INTELLIGENCE RELATIONSHIP MODEL PROPRIETARY THIRD PARTY WHOLESALE INSTITUTIONAL Advice Platform Financial Planning Product Design LOCAL BANKS OTHER DISTRIBUTION IFA ONLINE B2B SERVICE 6
THAT IS GLOBAL AND INTEGRATED Distribution Channels Retail & Private Proprietary Third Party/Wholesale Institutionals Assets Italy Germany AuM eur bn 110.5 49.7 15 TOP STARFUNDS Reputation Values Brand Culture Pioneer Investments model Investment solutions Open/Closed Mutual funds Hedge funds Segregated accounts Guaranteed & VAR products Asset allocation Pension products International USA CEE Austria (1) Total AuA 15.5 52 10.2 18.3 256.2 38.2 Data as per 31 May 2007 (1) Pioneer Investments Austria is currently a subsidiary of Bank Austria Creditanstalt 7
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 8
PIONEER INVESTMENTS IS THE NUMBER ONE PLAYER IN THE CEE REGION LEVERAGE ON international brand recognition one engine for investments wide range of global and local products strong distribution channels 9
WITH A DIVERSIFIED PORTFOLIO... Pioneer Investments Poland Hungary Czech Rep. Slovakia Bulgaria Slovenia Romania Russia Pioneer AuM total Further AuM non-consolidated Croatia Turkey AuM total AuM eur mln 7,985 1,273 628 130 77 65 12 start up 10,170 1,061 (1) 3,271 (2) 14,502 BREAKDOWN OF ASSETS IN CCE Others 21% Balanced 46.4% Equity 32.6% Source: Pioneer Investments, as of 31/5/2007 (1) including AuM of ZB Invest, Croatia (2) AuM of Yapi Kredi Asset Management 10
SHOWING IMPRESSIVE GROWTH AND CREATING INCREASING VALUE AuM eur mln 8,258 10,170 Net Sales eur mln 1,046 1,322 1,140 526 1,029 1,574 2,277 3,698 5,911 52 408 561 716 671 2000 2001 2002 2003 2004 2005 2006 May 07 Cost/Income Ratio 117% 77% 66% 47% 49% 37% 2001 2002 2003 2004 2005 2006 2000 2001 2002 2003 2004 2005 2006 2007YTD EBIT eur mln 5.8 11 24.3 37.8 67.6-3.3 2001 2002 2003 2004 2005 2006 EBIT (1) -0.5% 3.3% 4.4% 6.7% 7.3% 9.4% (1) In % of total Pioneer 11
CEE MORE THAN ON TRACK WITH 2008 TARGETS AuM eur bn EBIT eur mln 10.8 11.2 83 83 7.1 7.1 8.3 8.2 9.6 40 68 55 69 40 2005 2006 2007 F 2008 T 2005 2006 2007 F 2008 T Actual 3y-plan Actual 3y-plan 12
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 13
Example: Poland POLAND THE BENCHMARK A REWARDING VENTURE BUILT ON STRONG COMPETITIVE ADVANTAGES Market leader: first mutual fund company in Poland, no. 1 with regards to AuM, which amounted to almost eur 8 bn as per 5/07 Strong brand, good reputation, certified by numerous awards Best and most efficient financial services company in Poland Best known and most respected brand in the financial sector Widest product range offered by locally domiciled fund manager (30 funds) Effective co-operation with distribution channels, with integration enhancing potential Stocks and equity 35% AuM 2003-2006: CAGR 40.2% p.a. EBIT 2003-2006: CAGR 86.4% p.a. ASSET MIX Liquidity and cash 4% Fixed Income products and bond 12% Balanced and flexible 49% 14
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 15
CEE IS ONE OF THE FASTEST GROWING REGIONS, BEING REFLECTED IN STRONG GROWTH OF HOUSEHOLD WEALTH Estimated growth of Household Wealth 2006-2009 eur bn Turkey 155 +63 Russia 177 +209 Slovenia Slovakia Romania Poland Hungary 23 24 23 +10 +12 +16 60 182 +15 +72 CEE + Russia: CAGR 16.4% p.a. from eur 760 bn in 2006 to eur 1,200 bn in 2009 Czech Rep. 77 +21 Croatia 29 +13 Bulgaria 11 +8 Wealth 2006 Wealth Growth 06-09 Source: New Europe Households Wealth and Debt Monitor, UniCredit May 2007 16
WITH FUNDS AMONGST THE MOST DEMANDED PRODUCTS Estimated cumulative growth of bank deposits vs. funds 2006-2009 % 54.1 60.5 Bank deposits Mutual funds CEE + Russia: CAGR% 40.8 deposits + currencies 15% securities + shares 11% mutual funds 22% insurance 18% pension funds 21% 15.3 7.1 13.3 6.4 14 5.7 10.2 6.5 18.6 20.8 7.9 16 3.0 20.3 27.9 15.0 15.5 Bulgaria Croatia Czech Rep. Hungary Poland Romania Slovakia Slovenia Russia Turkey Source: New Europe Households Wealth and Debt Monitor, UniCredit May 2007 17
OFFERING HUGE POTENTIAL TO REACH WESTERN STANDARDS 80% Managed as a % of HFA 60% 40% 20% 0% Netherlands US Australia Sweden Canada UK France Italy Switzerland Singapore Germany Spain Korea Poland Hungary Japan Greece Slovakia Turkey Household portfolios: Switching from liquidity & unmanaged to managed assets Czech Russia Croatia Bulgaria Romania CEE 0% 20% 40% 60% 80% 100% Per capita HFA: Europe Asia & Pacific New Europe North America Liquidity as a % of Household Financial Assets (HFA) Source: PGAM Research based on Central Banks data 18
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 19
THE APPROACH: BUILD ON PIONEER S COMPETITIVE ADVANTAGES Market share High Low Initiating coverage Approach A superior advise model Build on Pioneer s strengths Create seeds for future growth Croatia (1) Bulgaria Ranking 1 1 Market share in % 29.9 23.5 Poland 1 22.3 Turkey (2) 2 20.0 Czech Rep. 4 7.0 Hungary 5 8.0 Slovakia 7 2.3 Romania 8 5.8 Slovenia 11 2.8 Source: Pioneer Investments, as of 31/03/2007 (1) Including market share of ZB Invest, Croatia (2) Market share of Yapi Kredi Asset Management 20
Our Approach to Competitive Challenges in Countries with High Market Share: a Superior Advice Model BY OFFERING A SUPERIOR ADVICE MODEL Tactical Asset Allocation Absolute Return Objective Cooperation for Advice Unbundling level Multi-classes ALM 150 200 150 Discretionary Account Advice account 100 130 110 90 Total return funds Client sophistication Use the most appropriate approach to help client in: understanding risk appetites matching risk with realistic expectations 21 Adopt, propose the adequate solutions which best fit client objectives and expectations
AND LEVERAGING ON PIONEER S STRENGTHS INTERNATIONAL RECOGNIZED BRAND Re-branding campaigns introducing Pioneer to local markets, e.g. Hungary PRODUCT RANGE & KNOW-HOW Extensive range of both global (Luxembourg-based) and local products with a competitive edge, e.g. guaranteed, total return funds STRONG INVESTMENT ENGINE Powerhouse of quality for every stage of the product development cycle Innovative products Time-to-market production Solutions for specific needs 22
RUSSIA A NEW VENTURE RUSSIA A market ready for take-off The environment: huge potential High GDP growth Increased demand for capital Offshore products investing into Russia Excellent positioning of distribution channels Strong proprietary channel already existing (IMB) Group relationships to future third party sales channels PIONEER S APPROACH Establish leading domestic asset manager covering all major market segments Leverage Pioneer s global investment capabilities Provide local platform for Pioneer s global clients investing into Russia 23
IN A DYNAMIC MARKET WITH AMBITIOUS GROWTH TARGETS SUPPORTED BY A WELL BALANCED DISTRIBUTION MODEL AuM eur mln ~2,140 Net sales eur mln ~1,170 ~450 2008 2009 2010 ~840 ~660 Proprietary fund sales 70% Non-proprietary fund sales 30% ~430 2008 2009 2010 24
AGENDA Asset Management at a glance CEE - the story so far Poland the benchmark Opportunities and challenges The approach The goals 25
Goals for the future THE GOALS: TAKE ADVANTAGE OF A FAST GROWING REGION AuM in CEE 14.5 25.5 Additional AuM of eur 11bn till 2010 Number one in the region Amongst the top 3 in every major market Enter into new markets to create seeds for future growth Russia and beyond May '07 Dec. '10 Maintain margins with efficient product cycle management and innovation Incl. Croatia and Turkey 26