Bff Bank Spa · MIL:BFF
Bff Bank Spa — BFF Banking Group — Investor Presentation (December 2017)
22 slides from Bff Bank Spa's investor presentation, December 2017
Slide 1: BFF Group overview
BFF Group overview December 2017
Slide 2: Disclaimer
Disclaimer This presentation may contain written and oral "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number or assumptions, expectations, p
Slide 3: BFF Banking Group: A Bank Like No Other
BFF Banking Group: A Bank Like No Other Leading financial services provider to suppliers of the European Healthcare and Public Administration sectors Market leader in large and underpenetrated markets €250bn market Solid and resilient business model with compelling assets and >20% CAGR 2013-2016(1)
Slide 4: Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers
Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers, to Tackle the Payment Delays From the Public Administration in Southern Europe and CEE Endemic Delay in Payments in the Public Sector €250bn of Public Sector expenditures in the countries we operate in(4)
Slide 5: BFF Banking Group’s Services Offered
BFF Banking Group’s Services Offered General Overview Focus on Non-recourse Factoring – Revenues Model Pay Purchase Price Collect Cash • Three business lines: Suppliers Debtors Sell Receivables Submit Receivables − Non Recourse Factoring (“Purchased”) (Funded business, • Healthcare + - + • Healthcar
Slide 6: Solid Business Model…
Solid Business Model… Suppliers Debtors Long-standing relationship with top suppliers to the Long track record in dealing with Public entities PA (leading multinational and national suppliers) and deep knowledge of the payment dynamics top 10 clients have been BFF clients for more than bette
Slide 7: …Able to Grow Profitably through Every Season
…Able to Grow Profitably through Every Season Net Income (2007-2016) Credit Bubble Financial Crisis Sovereign Debt Crisis BFF with Banking License Downgrade Downgrade of Downgrade Downgrade of ofItalian ITA Gov. Gov. Downgrade Downgrade ofto BBB Italian Downgrade Downgrade to of Italian Downgrade Do
Slide 8: We Operate in an Underpenetrated €250bn Market, with Leadership Position in Many Geographies…
We Operate in an Underpenetrated €250bn Market, with Leadership Position in Many Geographies… Key Considerations BFF Positioning Total Public Expenditure in Goods and Service (€bn) Non-recourse Factoring outstandings 2020E Total potential market is the with PA & NHS (€7.3bn) 134 140 133 132 136 pu
Slide 9: …With a Growing Business, Increasingly Diversified…
…With a Growing Business, Increasingly Diversified… Key Considerations Customer Loans Evolution (€m) Significant customer loans growth (CAGR BFF ex Magellan (€m) 2,596 13-16 of +22%) with higher contribution from less capital intensive segments 2,211 545 (non NHS public administration) 405 1,962 2
Slide 10: …and with a Fortress Balance Sheet and Low Risk Profile…
…and with a Fortress Balance Sheet and Low Risk Profile… Key Considerations Breakdown of Balance Sheet 9M17 (€m) A fortress balance sheet 4,216 4,216 − Conservative asset / liability management 120 Other 179 Other 204 AFS approach: loan book funding duration higher Liquid government bonds REPOs th
Slide 11: … Couple With a Diversified Funding Base…
… Couple With a Diversified Funding Base… Key Considerations Available Funding(1) (€m) Liquidity 351% 391% 502% 286% Balanced funding profile with deposits Coverage Ratio(2) accounting for 36% of drawn funds: 3,152 (3) (3) 2,988 − €799m deposits gathered as of September 2017, c. 2x versus FY2015 8
Slide 12: … and Backed by a Strong Capital Position…
… and Backed by a Strong Capital Position… Total Capital Ratio - Banking Group ex TUB Capital Ratio(1) Robust capital position maintained also after the cash SREP Requirements acquisition of Magellan, the full 2016 net income pay-out CET1 18.6% 16.7% 13.7% 14.0% 6.55% and the DBRS Italian downgrad
Slide 13: Positive Trend in Revenues
Positive Trend in Revenues Key Considerations Adjusted Net Banking Income(1) (€m) Net banking income adjusted increased Net of €2m financing cost by 8% in 2016 to €175m (including for Magellan acquisition (7 Magellan and €2m financing costs): months) and excluding ca. 175 €4m of extraordinary one-
Slide 14: Potential for Further Funding Cost Optimization
Potential for Further Funding Cost Optimization Key Considerations Interest Expenses (€m) Cost of Funding(1) Reduction in cost of funding continued with an average cost of BFF ex Magellan 4.9% 3.4% 2.2% 1.7% funding of 2.03% in 9M17, more than offsetting Tier 2 issuance and Vs. 4.4% Magellan acqui
Slide 15: Already Invested in the Business to Capture Future Growth Potential
Already Invested in the Business to Capture Future Growth Potential Key Considerations Operating Costs Adjusted for Extraordinary Items(1) (€m) Cost / Income adjusted(1,2) 30% 32% 30% 32% 35% 37% BFF heavily invested over the last three years in infrastructure and people to support growth 56(1) 7
Slide 16: High Profitability and Significant Dividend Capacity
High Profitability and Significant Dividend Capacity Key Considerations Net Income adj(1) (€m) Almost doubled net income in the last 4 years to €88m RoTE adjusted combined(1) 26% 22% 28% 37% 31% 29% (incl. Magellan) Equal to €60m excluding 88(4) i. €2.7m of Tier — Significantly improved return on
Slide 17: High Visibility of Future Revenues from LPI
High Visibility of Future Revenues from LPI Key Considerations LPI Stock Evolution (Excl. Magellan) (€m) The full impacts on BFF’s P&L originated by the LPIs and related to the significant growth of purchased receivables over the last years 547 529 541 will be fully visible only in the coming year
Slide 18: Infrastructure, Funding and Capital Ready to Support Growth and Attractive Dividend Flow
Infrastructure, Funding and Capital Ready to Support Growth and Attractive Dividend Flow RoTE: 29%(1) Total Capital ratio: 19.4% Target Total Capital ratio: 15% 1 Invested in the Significant investment in infrastructure business for and expanded employee base to support business expansion Highly cap
Slide 19: Management Fully Aligned With Public Market Shareholders
Management Fully Aligned With Public Market Shareholders Management have been shareholders of the business since 2006 Senior executives have been in the bank on average for more than 12 years Paid only if budget achieved, zero otherwise Yearly management 50% in shares or stock options for risk t
Slide 20: BFF 2020 “Strategic Targets”
BFF 2020 “Strategic Targets” Further consolidate leadership in Italy Continue to develop tailor-made offering to serve specific customer needs High quality services for large clients covering the full healthcare value chain Increase penetration into adjacent segments of non-healthcare supplier
Slide 21: Appendix
Appendix bffgroup.com 21
Slide 22: Magellan – a growing business
Magellan – a growing business • The new business generated by Magellan in 9M17 (€372m), New Business and 9M17 original maturity(1) (€m) has an original maturity(1) of 3.9 years on average. In 9M17 loan maturity at origination: 47 months particular: 12 months 426 • 68% is represented by variable rate
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