Exor N.v. · EURONEXT:EXO
Exor — Investor Day (October 2017)
60 slides from Exor's investor day presentation, Oct 5, 2017
Slide 1: EXOR Investor Day
EXOR INVESTOR DAY OCTOBER 5, 2017
Slide 2: Forward-looking statements
Certain statements and information contained in this industries our portfolio companies serve, changes in presentation that are not statements or information of regulations and institutional framework (in each case, in historical fact constitute forward-looking statements, Italy or abroad), and many
Slide 3: Investor Day Agenda
EXOR INVESTOR AGENDA DAY 2017 ▪ EXOR: COMPANY UPDATE ▪ PARTNER RE ▪ CLOSING REMARKS ▪ Q&A SESSION OCTOBER 5, 2017 EXOR INVESTOR DAY 3
Slide 4: Company Update
EXOR INVESTOR COMPANY UPDATE DAY 2017 JOHN ELKANN EXOR CHAIRMAN AND CEO ENRICO VELLANO EXOR CFO OCTOBER 5, 2017 4
Slide 5: 1. History
COMPANY UPDATE 1. HISTORY OCTOBER 5, 2017 EXOR INVESTOR DAY 5
Slide 6: More than a century in business
MORE THAN A CENTURY IN BUSINESS 1899 Senator Giovanni Agnelli co-founds FIAT Senator Giovanni Agnelli creates a holding company, IFI, to control and 1927 oversee FIAT and his other businesses 1957 IFI acquires control of IFIL, a diversified financial service company 1964 IFINT IFINT (IFI Internation
Slide 7: Over a century of owning businesses
OVER A CENTURY OF OWNING BUSINESSES ConstitutionRe OCTOBER 5, 2017 EXOR INVESTOR DAY 7
Slide 8: Last decade: simplifying
LAST DECADE: SIMPLIFYING 5 HOLDING COMPANIES 1 HOLDING COMPANY OCTOBER 5, 2017 EXOR INVESTOR DAY 8
Slide 9: Last decade: globalizing
LAST DECADE: GLOBALIZING >2/3 REVENUES FROM EUROPE <1/3 REVENUES FROM EUROPE Note: Geographical split of Exor consolidated revenues as reported in our 2007 and 2016 financial statements, with 2007 additionally including Fiat Group's revenues which were not consolidated within Exor at the time. Total
Slide 10: Last decade: transforming Fiat
LAST DECADE: TRANSFORMING FIAT FROM AN ITALIAN INDUSTRIAL CONGLOMERATE… …TO THREE FOCUSED GLOBAL BUSINESSES FIAT2 SHARE PRICE 2009 2017 €3.6 €34.4 1) The Voluntary Employee Beneficiary Association, a United Automobile Workers administered trust established to pay health care benefits for retirees fr
Slide 11: 2. Today
COMPANY UPDATE 2. TODAY OCTOBER 5, 2017 EXOR INVESTOR DAY 11
Slide 12: EXOR Figures
EXOR FIGURES $25.7bn $21.8bn $15.3bn GROSS ASSET VALUE NET ASSET VALUE MARKET CAPITALIZATION 30% <15% <10 bps DISCOUNT LOAN-TO-VALUE RATIO HOLDING COSTS $155bn 350,000+ 180+ GROUP NET REVENUES1 GROUP EMPLOYEES COUNTRIES2 2016 EXOR is ranked 20th on the Fortune Global 500 list Note: Figures as of Jun
Slide 13: Main Businesses
EXOR MAIN BUSINESSES OCTOBER 5, 2017 EXOR INVESTOR DAY 13
Slide 14: Capital Allocation
EXOR CAPITAL ALLOCATION 1 2 3 INVEST IN OUR NEW BUSINESSES BUYBACK BUSINESSES TOTAL INVESTED AMOUNT1 ~$1.5 bn ~$7.0 bn ~$0.4 bn 2009-2017 YTD ▪ FCA mandatory convertible ▪ Acquisition of 100% of ▪ Between 2009 and 2017 we bond matured in 2016 PartnerRe’s common bought back ~10% of ▪ Increased invest
Slide 15: Objectives
EXOR OBJECTIVES OBJECTIVE WHERE WE ARE 1 NAV per share to outperform the MSCI World index in USD ✓ NAV per share has delivered ~22% vs. ~12% of the MSCI World 1 2 Free cash flows²> Dividends outflows ✓ ~$1,268 mn > $882 mn3 3 Investment Grade rating ✓ Rating: BBB+, stable outlook 1) Compounded annua
Slide 16: Total Shareholder Return
EXOR TOTAL SHAREHOLDER RETURN TOTAL SHAREHOLDER RETURN 2009 - 2017 YTD1 903% SHARE PRICE DIVIDENDS APPRECIATION DISTRIBUTED2 831% $882 mn 1) Corresponds to dividend adjusted share price (assumes reinvestment of distributed dividends in the stock) from March 2, 2009 up to September 28, 2017 2) Cumula
Slide 17: 3. Financial Metrics
COMPANY UPDATE 3. FINANCIAL METRICS OCTOBER 5, 2017 EXOR INVESTOR DAY 17
Slide 18: Net Asset Value
NET ASSET VALUE Note: Figures as of June 30, 2017 (with listed prices updated as of September 28, 2017) 1) Includes Juventus, The Economist, Welltec and other small investments OCTOBER 5, 2017 EXOR INVESTOR DAY 18
Slide 19: Gross Debt Composition
GROSS DEBT COMPOSITION ▪ Average interest cost of bonds debt equal to 3.0% and maturity February 2024 ▪ Constant efforts to balance financing across different sources, maturity profile and amounts ▪ Mix of debt denominated in Euro (82%) and USD (18%) 1) Gross debt as of June 30, 2017 (€3,321mn) at t
Slide 20: S&P rating, stable outlook confirmed in 2017
S&P RATING, STABLE OUTLOOK CONFIRMED IN 2017 CORPORATE CREDIT RATING LONG-TERM: BBB+ SHORT-TERM: A-2 OUTLOOK: STABLE FINANCIAL RISK SCORE BUSINESS RISK SCORE CURRENT POSITIONING IN THE RATING MATRIX LOAN-TO- Current LTV ratio <15%1 VALUE vs (“LTV”) RATIO S&P threshold = 20% 1) LTV ratio calculated a
Slide 21: PartnerRe
EXOR INVESTOR PARTNER RE DAY 2017 EMMANUEL CLARKE PARTNER RE PRESIDENT AND CEO MARIO BONACCORSO PARTNER RE EVP AND CFO OCTOBER 5, 2017 21
Slide 22: EXOR Investor Day
EXOR Investor day October 5, 2017
Slide 23: Safe Harbor
EXOR Investor day October 5, 2017 23 Safe Harbor This presentation may contain, and PartnerRe may from time to time make statements, whether written or oral, that may be considered forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “m
Slide 24: Agenda
EXOR Investor day October 5, 2017 24 Agenda Industry overview and PartnerRe positioning Achievements of the past 12 months 2017 Financial outlook
Slide 25: PartnerRe well positioned for current market characteristics and trends
EXOR Investor day October 5, 2017 25 PartnerRe is strategically well positioned to benefit from current market characteristics and trends ▪ Continued demand for global and relevant reinsurers ̵ We expect to see a continued demand for reinsurance due to an increasingly complex world, high protection
Slide 26: Continued need for well-diversified, relevant reinsurers
EXOR Investor day October 5, 2017 26 There will continue to be a need for well-diversified, 1 relevant reinsurers ▪ More complex environment: Traditional forms of risk increasingly exposed to globalization and urbanization, and new forms of risk develop (e.g,. cyber risk, supply chain risk) ▪ High p
Slide 27: Reinsurance remains an inefficient market with cycles
EXOR Investor day October 5, 2017 27 1 Reinsurance will broadly remain an inefficient market with cycles, albeit of less amplitude ▪ Many classes have substantial efficiency within a segment – even for these, negative risk selection remains an important factor (avoiding large mistakes) Ineffi- cient
Slide 28: PartnerRe is a global, diversified, relevant and agile reinsurer
EXOR Investor day October 5, 2017 28 PartnerRe is a global, diversified, relevant and agile 2 reinsurer Global: Global reach to access risks where they are. Broad access to business enabled by its own expertise and strong client & broker relationships Diversified: Highly diversified book of Life and
Slide 29: Well positioned to achieve strategic goals and differentiate from peers
EXOR Investor day October 5, 2017 29 PartnerRe is well positioned to achieve its strategic 2 goals and differentiate from its peers ▪ Positioned to be core reinsurance partner to clients and brokers: ̵ Strength: $8B total capital and commitment to “AAA” level of capitalization – can provide meaningf
Slide 30: Global footprint and broad underwriting diversification
EXOR Investor day October 5, 2017 30 PartnerRe has a global footprint and a broad 2 underwriting diversification Geographic Distribution of Gross Premiums Written (FY16) Net Premiums Written by Line of Business (FY16) = Life & Health - $1.1bn = Property & Casualty - $2.1bn = Specialty Lines - $1.8bn
Slide 31: Life & Health provides diversification and growth opportunities
EXOR Investor day October 5, 2017 31 Life & Health provides sizeable and profitable 2 diversification and growth opportunities ▪ Diversification: Different reinsurance cycle and low correlation of losses vs. Property Strategic rationale for & Casualty reinsurance Life & Health reinsurance ▪ Profitab
Slide 32: PartnerRe strategic priorities
EXOR Investor day October 5, 2017 32 3 PartnerRe strategic priorities ▪ Increase footprint with key clients and brokers for sustained access to better business and Business Access readiness to participate with potential market opportunities ▪ Grow selectively Life & Health book ▪ Strike the right ba
Slide 33: PartnerRe Group objectives
EXOR Investor day October 5, 2017 33 4 PartnerRe Group objectives ROE of 8-10% over the next 3-5 years period, taking into account current market conditions, by leveraging all the components of reinsurance balance sheet ▪ROC > 8% Return over from any 3-5 year underwriting period capital on Underwrit
Slide 34: Agenda
EXOR Investor day October 5, 2017 34 Agenda Industry overview and PartnerRe positioning Achievements of the past 12 months 2017 Financial outlook
Slide 35: Key accomplishments of the past 12 months
EXOR Investor day October 5, 2017 35 Key accomplishments of the past 12 months ▪ New worldwide organizational structure, aligned with how our clients buy reinsurance; strengthened Global Accounts function ▪ Added and promoted new talent in Underwriting areas (e.g., new heads for Life & Health, APAC
Slide 36: Effective organizational structure aligned with client needs
EXOR Investor day October 5, 2017 36 Designed an effective organizational structure, A aligned with client needs ▪ Reorganized business operations with new worldwide organizational structure designed by products and client segments (P&C, Specialty, Life and Health) – better leveraging our worldwide
Slide 37: Strengthened Life & Health platform through Aurigen acquisition
EXOR Investor day October 5, 2017 37 Strengthened Life & Health platform through A Aurigen acquisition ▪ Acquisition of a life reinsurer serving Canada Canada Life Reinsurance market share (2015) (9% market share) and the US (5% market share), the largest regional market in the world E where Partner
Slide 38: Dynamically managed capital deployment to Cat through retro
EXOR Investor day October 5, 2017 38 Dynamically managed capital deployment to Cat through A use of retro, given decreasing expected profitability Probable Maximum Loss (Net PML in m $) Wind (1-in-250 years)3 Illustrative Schematic1 US Northeast International Peak 1,200 1,074 1,000 922 100% 1,008 20
Slide 39: Reduced operating costs and improved cost of capital
EXOR Investor day October 5, 2017 39 Undertook actions to reduce operating costs and B improve cost of capital ▪ Achieved > $60m of savings compared to the 2015 cost baseline Reduced ▪ H1 2017 operating costs 4% below budget operating costs ▪ Implementing additional cost actions during the course of
Slide 40: Re-designed Investments operating model and optimized portfolio
EXOR Investor day October 5, 2017 40 Re-designed Investments operating model and C optimized portfolio $bn 30-Sep-15 31-Dec-16 30-Sep-15 30-Jun-17 31-Dec-16 30-Jun-17 $bn % $bn $bn % % $bn $bn % % $bn % me 13.2 Standard Fixed Income 82.3% 15.2 13.2 89.5% 82.3% 14.8 15.2 86.6% 89.5% 14.8 86.6% lents
Slide 41: Prepared to deploy capital in selected investment strategies
EXOR Investor day October 5, 2017 41 C Prepared to deploy capital in selected investment strategies Normal Allocation Bands and Current Investment ($bn) Max Limit ($bn) Allocation Trend 0.0 0.2 0.4 0.6 0.8 1.0 1.2 current invested funds Equities 1.5 Alternative Credit 0.9 Third Party Private Equity
Slide 42: Agenda
EXOR Investor day October 5, 2017 42 Agenda Industry overview and PartnerRe positioning Achievements of the past 12 months 2017 Financial outlook
Slide 43: Outlook for Financial Year 2017
EXOR Investor day October 5, 2017 43 Outlook for Financial Year 2017 ▪ H1 2017 Net Income ROE of 8.0%1 ($243m net profits) driven by ̵ Non-life combined ratio of 91.7% ̵ Investments net total return of $363m (2.1% on average assets) ▪ Expected Q3 pre-tax loss in the $60-90m range (ca. 1-1.5% of comm
Slide 44: Closing Remarks
EXOR INVESTOR CLOSING REMARKS DAY 2017 JOHN ELKANN EXOR CHAIRMAN AND CEO OCTOBER 5, 2017 44
Slide 45: Diversified holdings outperform the businesses they own and the market
DIVERSIFIED HOLDINGS OVER PERFORM THE BUSINESSES THEY OWN AND THE MARKET 20Y Total Shareholder Return +859% +729% Diversified Holdings1 Holdings’ Businesses2 +227% MSCI World Index 1) A global group of diversified holdings index including: Bollore, CK Hutchinson, GBL, HAL, Investor AB, Industrivarde
Slide 46: Buy EXOR and get PartnerRe for free
BUY EXOR AND GET PARTNER RE FOR FREE EXOR MARKET CAP EXOR NET ASSET VALUE ASSETS EXCL. GROSS DEBT $15.3bn $14.8bn $7.0bn OTHERS EXOR trades at a discount of ~30% compared to a ~12% average discount of a selected group of investment holdings1 Note: Figures as of June,30 2017 with listed prices update
Slide 47: Quote from Senator Giovanni Agnelli
Above all we must always look to the future, foresee the future of new inventions, be unafraid of “the new”, delete from our vocabulary the word “impossible” Senator Giovanni Agnelli OCTOBER 5, 2017 EXOR INVESTOR DAY 47
Slide 48: Q&A Session
EXOR INVESTOR Q&A SESSION DAY 2017 OCTOBER 5, 2017 48
Slide 49: Appendix
EXOR INVESTOR APPENDIX DAY 2017 OCTOBER 5, 2017 49
Slide 50: Fiat Chrysler Automobiles
FIAT CHRYSLER AUTOMOBILES Economic rights: 29.23% Voting rights: 42.4% FINANCIAL SNAPSHOT 1 IFRS 2014 2015 2016 H1 2017 Shipments2 (000s units) 4,601 4,602 4,482 2,216 Major Global OEM and a portfolio of iconic brands Net Revenues (€bn) 94 111 111 55.6 Adjusted EBIT (€bn) 3.4 4.8 6.1 3.4 Mass market
Slide 51: PartnerRe
PARTNER RE Economic rights1: 100% Voting rights1: 100% FINANCIAL SNAPSHOT 2 US GAAP 2014 2015 2016 H1 2017 Net Premiums written ($m) 5,720 5,230 4,954 2,650 A leading global, diversified and pure-play reinsurer Operating Earnings ($m) 755 749 413 154 operating in over 100 markets Adj Net income ($m)
Slide 52: Ferrari
FERRARI Economic rights: 22.91% Voting rights: 32.75% FINANCIAL SNAPSHOT IFRS 2014 2015 2016 H1 2017 Shipments (units) 7,255 7,664 8,014 4,335 Net Revenues (€m) 2,762 2,854 3,105 1,741 The world’s most recognizable and powerful Adjusted EBITDA (€m) 693 748 880 512 luxury sports car brand Adjusted EB
Slide 53: CNH Industrial
CNH INDUSTRIAL Economic rights: 26.90% Voting rights: 39.91% FINANCIAL SNAPSHOT US GAAP 2014 2015 2016 H1 2017 Net sales of Industrial Global leader in the capital goods sector with a global Activities ($bn) 31.2 24.7 23.7 12.0 presence and broad reach through 12 brands Operating Profit of 1,988 1,4
Slide 54: Juventus
JUVENTUS Economic rights: 63.77% Voting rights: 63.77% FINANCIAL SNAPSHOT IFRS 2014/15 2015/16 2016/17 Professional Football Club and one of the most famous Total Revenues (€m) 384.2 387.9 562.7 and revered teams both in Italy and internationally Operating profit (€m) 19.3 20.2 67.4 Operating margin
Slide 55: The Economist
THE ECONOMIST Economic rights: 43.40% Voting rights 20.00% FINANCIAL SNAPSHOT 2014 2015 2016 2017 UK GAAP IFRS IFRS IFRS The leading source of analysis Revenues (£m) 328 324 331 353 on international business and world affairs Operating profit (£m) 55 59 61 54 Group operating profit 16.8% 18.3% 18.3%
Slide 56: Appendix
EXOR Investor day October 5, 2017 56 APPENDIX
Slide 57: PartnerRe Business Profile
EXOR Investor day October 5, 2017 57 PartnerRe Business Profile Company History Financial Metrics ▪ Founded in 1993 ▪ $6.9bn total shareholder’s equity (June 30, 2016) ▪ Strong, diversified franchise built on successful organic ▪ $5.4bn in Gross Written Premium (“GWP”, 2016) growth and 3 strategic a
Slide 58: PartnerRe Business Mix: Edge in Specialty Lines
EXOR Investor day October 5, 2017 58 PartnerRe Business Mix: Edge in Specialty Lines, Low Exposure to Property Catastrophe Specialty Lines Property & Casualty Life & Health ▪ Our clients are global ▪ Our clients are global and ▪ Our clients are life insurers insurers, Lloyds syndicates, regional/loc
Slide 59: Historical Financial Performance
EXOR Investor day October 5, 2017 59 Historical Financial Performance Top Line Premium Evolution Profitability ($m) ($m) 7,000 1,200 100% 6,000 1,000 93.6% 95% 5,000 800 87.8% 85.3% 86.2% 85.6% 90% 4,000 600 85% 3,000 5,570 5,932 5,548 400 998 749 80% 5,357 1,073 722 755 4,718 2,000 200 664 453 517
Slide 60: Slide 60