Business Plan CDP Group 2020 Strategic Guidelines
CDP: 165 years of history 18 November 1850: Cassa Depositi e Prestiti is born Founding elements Safeguarding and management of Postal Savings products Commitment to «works of public utility» Financing for State and Local Administrations Use of Cassa funds Art. 16 CDP funds will be used for loans to Divisions, Provinces, Towns and Cities, and Charity Institutions for the realization of public works and their debt resolution Evolving role over years Postal savings services were created with law n 2779 of 27 May 1875 «under State guarantee within Cassa Depositi e Prestiti.» 1
Institutional role to increase the value of household savings and support the economy Postal Funding Focus Areas Postal Savings Bonds Security State and Local Administrations Financing Passbook Savings Accounts Returns Liquidity Businesses and Infrastructure Long-term Equity Investments 2
New macroeconomic context: focus on growth and reform 2008-2009 2010-2014 2015 and beyond Private debt crisis Public debt crisis Re-launch economy KPI 1,2% GDP Growth Percent -3,3% -0,5% Spread BTP-BUND, Bps 84 243 97 Focus initiatives and interventions Support economy for benefit of businesses and families Lowering interest rates Support financial system Stabilization of financial system Extraordinary injection of liquidity Reinforcement of capital for banking system Austerity Structural reforms Activation of driving forces for growth Sound economic policies Plan 2020 3
CDP Group with Single DNA PROMOTIONAL institution with long-term view System approach, anti-cyclical in response to market gaps CDP recognized as NATIONAL PROMOTIONAL INSTITUTION 2016 Budget Law Oversight Juncker Plan initiatives Italian public funds and EU Structural Funds management COMPLEMENTARY to financial system channeling domestic and international resources SUSTAINABILITY: Investment logic as «market operator» Creating value for TERRITORY and attention to social issues and sustainable growth «CDP recognized as National Promotional Institution» «CDP can use part of resources to contribute to the realization of European Fund for Strategic Investments objectives» «to CDP and its controlled companies is given the mandate by the European Commission to implement financial instruments earmarked for European Structural Funds, or through entrustments by management authorities» 4
Guidelines business plan 2020 1 Government and Local Administrations 2 Infrastructure 3 Enterprises 4 Real Estate Ambition Support Local Contribute to a Support of all phases Leverage public real 160 bln CDP resources to support Administration investments and International change of pace in infrastructure creation and support of life cycle of enterprises and strengthen support estate, social housing, and tourism Italy and around Cooperation of environment of exports 105 bln of additional national and foreign 5 International, European, national investors infrastruttusostenere Attract resources from EU institutional investors and strengthen connection l ambiente with the Territory private and public resources. 6 Governance, skills and corporate culture Strengthen Group governance, enrich skills and promote «proactive corporate culture» 265 bln 7 Economic sustainability Optimize capital structure to guarantee economic sustainability 5
160 bln in resources mobilized Period of 2016-2020 plan, Billions of euro Intervention priorities Government and Local Administrations CDP Resources bln 15 Other system resources bln 5 Total system resources bln 20 Multiplier Index 1,3x Infrastructure 24 44 68 2,8x 163 Enterprises 117 46 1,4x Real Estate 4 11 15 3,8x Total ~160 ~105 ~265 1,7x 6
1 Government and Local Administrations: support of investments in a «restricted» context CDP Group Resources mobilized bln +22% ~13 ~15 Intervention priorities Public Finance Leveraging public assets and investing in efficiency Ambition Confirm historical role in supporting Public Administrations Support asset leveraging Promote investments in efficiency 2011-2015 2016-2020 Access to national and European funds Optimize management and use of EU Structural Funds «Fund of funds» Total activated resources: ~ 20 bln International Cooperation Support re-launch of International Cooperation Further interventions: Leverage cultural heritage Education to Employment 7
2 Infrastructure: support «change of pace» in the completion of works Intervention priorities Ambition CDP Group Resources mobilized bln ~24 +23% ~20 Advisory and promotion Infrastructure of system and PPP Play proactive and stimulating role in realization of new works Contribute to renewal of existing infrastructure Promote expansion of Public-Private partnerships 2011-2015 2016-2020 Access to capital markets Expand financial solutions to facilitate the launch of new projects (equity, credit enhancement, project bonds) Total activated resources: ~ 68 bln Environment Support investments for environmental protection and energy efficiency 8
3 Enterprises: support all phases of life cycle of Italian enterprises CDP Group Resources mobilized bln +73% ~67 ~117 Intervention priorities a b Industrial chain creation, innovation and development Growth capital Ambition Become leading Venture Capital operator Finance innovation and growth Support access to credit Develop Turnaround market Support Mid Corporate growth through growth capital Accelerate listing process and diversify financing sources 2011-2015 2016-2020 c Assets of national importance Intervene in capital of companies of national importance through Long-Term Equity Investments safeguarding their economic sustainability Total activated resources: ~ 163 bln d International expansion Significantly increase Export support through the creation of a single dedicated hub 9
3a Innovation and development: interventions to support enterprises along all phases of life cycle Phases of enterprise life cycle Startup/seed Development and consolidation Restructuring Goal CDP Interventions Become leading Venture Capital operator in Italy Co-financing platform Public/Private partnership program Further investments in Fund of Funds, Venture Capital and other platforms for «late-stage» Venture Capital (FII) Finance innovation and development More credit for SME via (i) risk sharing instruments; (ii) support development of alternative markets (esp. ABS, credit funds); (iii) new funds Financing innovative enterprises and projects Direct support for industrial chains growth of scale (FII) Growth capital (FSI SGR) Credit (reverse) factoring (SACE FCT) Development of Turnaround market Role as anchor investor for companies in turnaround company, which will be controlled by private investors, with the aim of favoring the re-launch of Italian firms that, notwithstanding temporary asset and/or financial difficulty, are characterized by adequate industrial and market potential. ~ 51 bln of mobilized resources (~ 89 bln activated resources) 10
3b/c Long Term Equity and growth capital for growth of enterprises Creation of long term investment portfolio (Asset Preserver) Separation of part of assets for Management/Exit (Private Sector Promoter) Creation of FSI SGR for intervention management and company growth support through growth capital (Private Sector Promoter) CDP Equity CDP Equity Other investors SGR FSI Growth Fund 1 FSI Growth Fund 2 FSI Growth Fund n New investments New investments New investments ~ 2.5 bln of mobilized resources 11
3d International Expansion: integrated model inspired by successful solutions in other countries Interventions Single access point Description Single hub at SACE, with Group guidance regarding political risk Optimized offering without overlap Collaboration No overlap in respect to domestic offering SIMEST products integrated in single offering Standardized SME package Maximization of insurance coverage Earmark financing complementarity to banking system Integrated network Integrated coverage strengthening current SACE network to support Group offering, including domestic products Partnership with third party networks and introduction of remote channels Strengthen Mid-Cap services Full support Efficient risk management to maximize support for enterprises ~ 63 bln in mobilized resources (~ 71 bln activated resources) 12
4 Real Estate: support leveraging of Italian real estate patrimony CDP Group Resources mobilized bln Intervention priorities Local Administration patrimony Ambition Leverage Local Administrations real estate patrimony ~2 +110% ~4 Social & Affordable housing Strengthen role of primary operators in Social & Affordable housing Leveraging spaces for social integration 2011-2015 2016-2020 Total activated resources ~ 15 mld Renewal projects Tourism assets Realize renewal and development projects in areas of national strategic importance: Innovation hubs, spaces for arts and career training Prisons and urban renewal Leverage accommodation infrastructure to support tourism sector, with special attention to development of southern Italy 13
5 International investors, European and Territory: attracting system resources «More Europe» Increased presence and development of relations with national and European institutions» Juncker Financial System Collaboration with National Promotional Institutions and the realization of related initiatives CDP has key role in the realization of «Junker Plan» This joint investment - the first of this kind for CDP - is a pilot of the enhanced coorperation between the EIF and NPIs for revitalizing the SMEs Securitisation market in order to support the financing of the real economy via capital market instruments and to catalyse resources from the private sector in the spirit of the European Fund for Strategic Investments in order to achieve a much wider outreach in support of SMEs. Attract international investors Attract resources in Italy Complementarity and collaboration with Italian banking system Strengthen Italian network Italy and collaboration with local institutions 14
6 Governance, skills and culture Group Governance Strengthen parent company s ability to direct and manage Skills Develop Group talent and attract new outside resources for new challenges Corporate culture Evolution of CDP Group culture in accordance with new role as National Promotional Institution 15
Business Plan - Q1 Main Steps Enterprises Investment along with EIF and KFW in Cash Securitization for Italian SMEs. 42 mln guarantee on a tranche of 40 million of a loan totaling 110 million Euros from the European Investment Bank for the RAM plant in Milazzo, Sicily. Real Estate 100 million to launch an investment fund of 1 billion euro in the tourism sector Export Credit lines and guarantees from the CDP Group to relaunch italian exports in Iran: 4 bln for export credit facilities 4 bln in guarantees from SACE on those credit lines 800 mln to revive the business of Italian SMEs within the country Gov. & Local Entities Agreement with multi regional utility Hera for financing energy efficiency investments 16