Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — Debt Investor Presentation (November 2015)
57 slides from Societe Generale S.a. Class A's debt investor presentation, November 2015
Slide 1: Societe Generale Positive Impact Bond
SOCIETE GENERALE POSITIVE IMPACT BOND NOVEMBER 2015
Slide 2: Disclaimer
DISCLAIMER The information contained in this document (the “Information”) has been prepared by the Société Générale Group (the “Group”) solely for informational purposes. The Information is proprietary to the Group and confidential. This presentation and its content may not be reproduced or distribu
Slide 3: Executive Summary
EXECUTIVE SUMMARY GROUP OVERVIEW AND 9M 2015 RESULTS SOCIETE GENERALE’S CORPORATE AND SOCIAL RESPONSIBILITY AMBITION AND POSITIVE IMPACT FINANCE SOCIETE GENERALE’S POSITIVE IMPACT BOND: RATIONALE AND KEY FEATURES APPENDIX
Slide 4: Positive Impact Bond: being part of a broader ambition
EXECUTIVE SUMMARY dd SOCIETE GENERALE POSITIVE IMPACT BOND: BEING PART OF A BROADER AMBITION GLOBAL TRENDS GLOBAL CHALLENGES 9 billion 70% of the Climate Natural Digitalization Access Access Access to Food Access to transport people population in change resources to housing to energy water security
Slide 5: Responsible finance: Positive Impact Finance
EXECUTIVE SUMMARY dd RESPONSIBLE FINANCE: POSITIVE IMPACT FINANCE POSITIVE IMPACT DEFINITIONS « Positive Impact Business » is defined as an activity having • a positive impact on at least one of the 3 pillars of sustainable development, i.e. environment, social and economic development • an approp
Slide 6: Societe Generale Group
EXECUTIVE SUMMARY dd SOCIETE GENERALE GROUP GROUP FINANCIAL PERFORMANCE Financial performance in line with the execution of the strategic plan • Solid business growth driven by successful client-focused strategy • Tight supervision of costs and risks: efficiency programme and strict monitoring of
Slide 7: Societe Generale Positive Impact Bond
EXECUTIVE SUMMARY dd SOCIETE GENERALE POSITIVE IMPACT BOND A EUR 500m 5-year senior unsecured bond to be issued Indicative Outstanding Breakdown of by Societe Generale to (re)finance loans which have Underlying Positive Impact Finance Assets climate benefits as of 31 Oct 2015 Climate benefits of
Slide 8: Indicative terms of the Positive Impact Bond
EXECUTIVE SUMMARY dd INDICATIVE TERMS OF THE POSITIVE IMPACT BOND Issuer Societe Generale SA Format EMTN Status of the Notes Senior, unsecured, unsubordinated A2 (stable outlook) (Moody's) / A (negative outlook) (S&P) / A (stable outlook) (Fitch) / A Issuer Rating (high) (stable watch) (DBRS) A2 (st
Slide 9: Group Overview and 9M 2015 Results
EXECUTIVE SUMMARY GROUP OVERVIEW AND 9M 2015 RESULTS SOCIETE GENERALE’S CORPORATE AND SOCIAL RESPONSIBILITY AMBITION AND POSITIVE IMPACT FINANCE SOCIETE GENERALE’S POSITIVE IMPACT BOND: RATIONALE AND KEY FEATURES APPENDIX
Slide 10: Societe Generale Group at a glance
SOCIETE GENERALE GROUP OVERVIEW dd SOCIETE GENERALE GROUP AT A GLANCE We are a leading European Universal Bank with an international reach and solid roots • 150 years of existence dedicated to accompanying corporate and retail clients internationally We have significantly strengthened our capita
Slide 11: Taking advantage of the European rebound
SOCIETE GENERALE GROUP dd TAKING ADVANTAGE OF THE EUROPEAN REBOUND Group NBI(1) EUR 6.0bn, +2.1%* in Q3 15 vs. Q3 14: NBI substantially higher* vs. Q3 14 in French and International Retail Banking and Financial Services activities, low Global Markets in challenging market conditions Successful Accel
Slide 12: Solid business results
SOCIETE GENERALE GROUP dd SOLID BUSINESS RESULTS Group Results (in EUR m) NBI (1) at EUR 6.0bn in Q3 15, +2.1%* vs. Q3 14 In EUR m Q3 14 Q3 15 Change 9M 14 9M 15 Change Net banking income 5,876 6,364 +8.3% +7.9%* 17,432 19,586 +12.4% +10.3%* • Good commercial activity overall Net banking income (1
Slide 13: CSR Ambition and Positive Impact Finance
EXECUTIVE SUMMARY GROUP OVERVIEW AND 9M 2015 RESULTS SOCIETE GENERALE’S CORPORATE AND SOCIAL RESPONSIBILITY AMBITION AND POSITIVE IMPACT FINANCE SOCIETE GENERALE’S POSITIVE IMPACT BOND: RATIONALE AND KEY FEATURES APPENDIX
Slide 14: CSR approach: commitments
SOCIETE GENERALE GROUP’S CORPORATE AND SOCIAL RESPONSIBILITY dd CORPORATE SOCIAL RESPONSIBILITY APPROACH: COMMITMENTS The Group is committed to honor its obligations related to the environment, the workforce, and society across all of its activities and in all countries where it is established Best
Slide 15: CSR approach: strategic priorities
SOCIETE GENERALE GROUP’S CORPORATE AND SOCIAL RESPONSIBILITY dd CORPORATE SOCIAL RESPONSIBILITY APPROACH: STRATEGIC PRIORITIES Since 2012, the Bank has implemented its ambition in sustainable growth through 5 CSR strategic priorities across the Group: ENVIRONMENT & RESPONSIBLE SOLIDARITY RESPONSIBLE
Slide 16: A strong CSR recognition by rating agencies
SOCIETE GENERALE GROUP’S CORPORATE AND SOCIAL RESPONSIBILITY dd A STRONG CSR RECOGNITION BY RATING AGENCIES Extra--Financial Ratings: Ongoing Progress Extra RobecoSAM rating 85 75 65 In 2015, Societe Generale is the “most 55 informative company over 1309 companies” 45 as assessed by Vigeo 35 25 15 2
Slide 17: CSR business achievements in 2014
SOCIETE GENERALE GROUP’S CORPORATE AND SOCIAL RESPONSIBILITY dd CSR BUSINESS ACHIEVEMENTS IN 2014 RESPONSIBLE FINANCE PRODUCTION #1 BEST SRI RESEARCH* IN 2014: EUR 958m* Positive Impact Finance *Voted by investors in 2015 Extel survey EUR 1.4bn* Green financing 70% Green projects among Power project
Slide 18: Positive Impact Bond: Rationale and Key Features
EXECUTIVE SUMMARY GROUP OVERVIEW AND 9M 2015 RESULTS SOCIETE GENERALE’S CORPORATE AND SOCIAL RESPONSIBILITY AMBITION AND POSITIVE IMPACT FINANCE SOCIETE GENERALE’S POSITIVE IMPACT BOND: RATIONALE AND KEY FEATURES APPENDIX
Slide 19: Positive Impact Bond: a robust framework
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK A framework fully aligned with the Green Bond Principles & the Positive Impact Assessment Framework 2 - Asset Evaluation & Selection 3 - Management of Proceeds 1 - Use of Proceeds 4 - Reporting 5 - Ass
Slide 20: Framework: use of proceeds
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK 2 3 1. Use of Proceeds 1 4 5 Eligible categories: Indicative Outstanding Breakdown of Underlying Positive Impact Finance Assets Renewable Energy: Investments in conception, as of 31 Oct 2015 construc
Slide 21: Framework: asset evaluation and selection
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK 2 3 2. Asset Evaluation and Selection 1 4 5 A robust decision-making process divided into 3 steps based on internal E&S procedures Positive Impact Assessment Step 1: An Environmental Social and Gover
Slide 22: Framework: management of proceeds
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK 2 3 3. Management of proceeds 1 4 5 At time of issuance, 100% of bond proceeds will be allocated to a selection of eligible Positive Impact Finance assets for a total outstanding of EUR 554M During
Slide 23: Framework: reporting
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK 2 3 4. Reporting 1 4 5 Access to reporting on Societe Generale’s website through dedicated annual Investor Reports, including the following information: • Climate benefits indicators: - Ex-Ante estim
Slide 24: Framework: assurance
SOCIETE GENERALE POSITIVE IMPACT BOND dd SOCIETE GENERALE POSITIVE IMPACT BOND: A ROBUST FRAMEWORK 2 3 5. Assurance 1 4 5 Vigeo second party opinion “In light of the review of these three components, Vigeo confirms that the bond to be issued by Societe Generale is a “Positive Impact Bond” which is
Slide 25: A combination of best standards
SOCIETE GENERALE POSITIVE IMPACT BOND dd A COMBINATION OF BEST STANDARDS • Second party opinion provided • Pre & Post assessment of use of by an external ESG auditor (Vigeo) • Best E&S standards: Equator proceeds with continuous on the sustainable credentials of Principles, SG in-house 12 sector mon
Slide 26: Appendix
EXECUTIVE SUMMARY GROUP OVERVIEW AND 9M 2015 RESULTS SOCIETE GENERALE’S CORPORATE AND SOCIAL RESPONSIBILITY AMBITION AND POSITIVE IMPACT FINANCE SOCIETE GENERALE’S POSITIVE IMPACT BOND: RATIONALE AND KEY FEATURES APPENDIX
Slide 27: Appendix contents
dd APPENDIX 1) POSITIVE IMPACT ASSESSMENT FRAMEWORK: CASE STUDY 28 2) USE OF PROCEEDS INITIAL REPORTING (EXTRACT) 29 3) VIGEO SECOND PARTY OPINION 31 4) EY INDEPENDENT REPORT 44 5) SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION 48 POSITIVE IMPACT BOND NOVEMBER 2015 P.27
Slide 28: Positive Impact Assessment Framework: case study
APPENDIX: POSITIVE IMPACT ASSESSMENT FRAMEWORK: CASE STUDY dd POSITIVE IMPACT ASSESSMENT FRAMEWORK: CASE STUDY THE CASE OF A POSITIVE IMPACT BIOMASS PLANT ASSET DESCRIPTION: Financing for the development and construction of a 12.9 MW biomass power plant on the site of a former sugar mill located in
Slide 29: Use of proceeds initial reporting: key E&S impact indicators
APPENDIX: USE OF PROCEEDS INITIAL REPORTING (EXTRACT) dd USE OF PROCEEDS INITIAL REPORTING – KEY E&S IMPACT INDICATORS CLIMATE BENEFITS Ex-ante estimated annual GHG emissions reduced or avoided in tCO2e 6,056,269 Total Capacity of Renewable energy plant(s) in MW 3,393 Source of Renewable Capacity Ca
Slide 30: Use of proceeds initial reporting: proceeds allocation
APPENDIX: USE OF PROCEEDS INITIAL REPORTING (EXTRACT) dd USE OF PROCEEDS INITIAL REPORTING – PROCEEDS ALLOCATION Indicative outstanding of underlying positive impact finance assets: EUR 554m Underlying physical assets SG initial N° Positive impact Finance assets Signing Date Maturity Date Capacity
Slide 31: Second party opinion on sustainability of Positive Impact Bond
1 SECOND PARTY OPINION ON SUSTAINABILITY OF SOCIETE GENERALE’S “POSITIVE IMPACT BOND” SCOPE Vigeo was commissioned to provide an independent opinion on the sustainable credentials of the “PI Bond” (“Positive Impact”) to be issued by Société Générale, according to the Vigeo Environmental, Social and
Slide 32: Stakeholder-related ESG controversies and disputable activities
Stakeholder-related ESG controversies and disputable activities: The Bank sector is particularly subject to ESG-controversies, especially regarding business ethics issues. As regards Société Générale specifically, as of September 2015, the company faced frequent controversies (13 cases) mostly relat
Slide 33: Reasonable level of assurance on asset evaluation and selection
We provide a reasonable level of assurance on the eligible asset evaluation and selection process, i.e. on both ESG and PI assessment frameworks. The ESG assessment framework is relevant, regarding international standards and sector issues, coherent with Société Générale’s commitments in terms of re
Slide 34: Vigeo opinion sign-off and disclaimer
Paris, September 21st 2015 CSR Consultant CSR Consultant Laurie Chesné Rudy L’Espagnol Disclaimer Avoidance of Conflict of Interest: Vigeo has, to date, executed two previous audit missions for Société Générale. No established relationship (financial or others) exists between Vigeo and Société Génér
Slide 35: Detailed results: Part I. Issuer
DETAILED RESULTS Part I. ISSUER Level of the issuer’s CSR performance: As of December 2014, Société Générale displays an overall robust ESG performance in absolute terms and is among the best performers of the Diversified Bank Vigeo sector. The company achieves advanced performance in the Environmen
Slide 36: Analysis of stakeholder-related ESG controversies
Analysis of stakeholder-related ESG controversies and disputable activities ESG Controversies (sources: Factiva research and company's sources) Frequency: as of September 2015, Société Générale faces frequent allegations: the company is currently involved in 13 stakeholder-related ESG controversie
Slide 37: Part II. Assets
Part II. ASSETS Asset Pipeline Asset evaluation and selection framework Sustainability management of the asset: Environmental, Social and Governance 1. Attest the Sustainable Value of the asset through ESG factors managed Assessment through the asset lifecycle, based on international standards and i
Slide 38: Management of proceeds
Management of proceeds The net proceeds of the issuance will be managed within Société Générale treasury liquidity portfolio, in cash or other liquidity instruments, before the fund allocation which should reach 95% within 12 months after the issuance. In case of divestment or early reimbursement, t
Slide 39: Evaluation of asset impacts: Positive Impact assessment framework
Evaluation of the asset impacts regarding the Positive Impact assessment framework The evaluation framework is relevant: - 17 impact categories, including 9 social, 7 environmental and 1 economic are clearly defined, using reliable sources of information - Impact categories are exhaustive regarding
Slide 40: Part III. Reporting
Part III. REPORTING Selected Assets Reporting Framework 4. Report to investors financed assets, climate benefits and responsible Reporting to investors on assets, management of the asset funded via reporting indicators climate benefits and responsible management (reporting indicators) Monitoring con
Slide 41: Environmental, social and economic impact categories
Environmental impact categories Social impact categories Air Climate Access to water Access to transportation Water Resource efficiency Access to energy Access to housing Soil Waste efficiency Level of education Access to food Biodiversity Quality of health Creation of employment Economic impact cat
Slide 42: Methodology
METHODOLOGY In Vigeo’s view, Environmental, Social and Governance (ESG) factors are intertwined and complementary and cannot be separated when assessing the management of sustainability in any organization or in any activity, including the issuance of green bonds. In this sense, we write an opinion
Slide 43: Part II. Assets: use of proceeds
Part II. ASSETS Use of proceeds- Eligible assets and asset benefits The use-of-proceeds requirements are defined to ensure that the funds raised are used to finance eligible assets and are traceable within the issuing organization, and include the management of proceeds. The purpose of the bond’s as
Slide 44: EY independent report cover
Société Générale October 31, 2015 Independent report of one of the statutory auditors on the compliance of selected assets for the “Positive Impact Bond” with the Positive Impact Assessment Framework and the Climate benefits criteria 44
Slide 45: Independent report of statutory auditors
+33 (0) 14693 6000 Ernst & Young et Autres 6 Tour First .ey.com/tr TSA 14444 92037 Paris - La Défense cedex Société Générale October 31, 2015 Independent report of one of the statutory auditors on the compliance of selected assets for the “Positive Impact Bond” with the Positive Impact Assessment Fr
Slide 46: Nature and scope of work
a EY Nature and scope of work In order to be able to express our conclusion, we undertook the following work, between June 2015 and September 2015: e We assessed the suitability of the Positive Impact Assessment Framework and the Climate benefits criteria regarding their relevance, completeness, cla
Slide 47: EY conclusion
a EY o Collective Transports & Infrastructure: Investments in conception, construction, development and maintenance of public collective transport and collective transport infrastructure. e The selection of eligible assets is performed by the Positive Impact Finance team according to internal proced
Slide 48: Low cost of risk
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd LOW COST OF RISK Cost of Risk (in bp bp))(1) French Retail Banking 2016 • Downward trend confirmed, low level on Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Targets corporates 66 51 47 38 42 FRENCH 45-50 RETAIL BANKING International Retail Banking an
Slide 49: Solid capital position
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd SOLID CAPITAL POSITION CET1 Ratio(1) Common Equity Tier 1 Ratio(1) in line with Hybrid coupons trajectory +3bp 10.5% at end-Q3 15, up +18bp vs. Q2 15 -11bp +10bp +22bp -3bp • Solid capital generation DVA and Q3 15 Dividend RWA prudentia
Slide 50: Solid liquidity position
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd SOLID LIQUIDITY POSITION Short term wholesale resources* (in EUR bn bn)) Robust balance sheet structure with an and short term needs coverage** (%) overall stabilization 140 120 • Short term funding at 8% of funded balance 115 100 sheet
Slide 51: Liquid asset buffer
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION LIQUID ASSET BUFFER Liquid asset buffer (in EUR bn bn)) Further strengthening of liquid asset 144 140 146 152 166 buffer to EUR 166bn in September 2015 • Up by + EUR 14bn since June 2015 • Covering 298% short term funding (excl. 72 long te
Slide 52: Strengthened funding structure
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd STRENGTHENED FUNDING STRUCTURE Significant shift towards stable resources Funded balance sheet (in EUR bn bn)) vs. short term funding 699 699 • Short term funding at 8% of funded balance 669 669 sheet, down vs. 25% at mid-2011 56 CENTRA
Slide 53: Group funding
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd GROUP FUNDING 2015 long term funding programme(1) Parent company funding programme EUR 25-27bn Issued by parent company EUR 27.8bn Senior debt EUR 23.0bn o/w unsecured debt EUR 21.5bn Average maturity: 4.6 years Average spread: Euribor
Slide 54: Diversified access to long term funding sources
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd DIVERSIFIED ACCESS TO LONG TERM FUNDING SOURCES Long Term Funding Breakdown(1) Access to diversified and complementary LT Interbank investor bases through: liabilities(5) Subordinated debt(2) • Subordinated issues 12% 14% • Senior vanil
Slide 55: Credit ratings overview
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd CREDIT RATINGS OVERVIEW DBRS Key strengths reflected in Societe Generale’s ratings are its solid Senior Long-term debt A (high) (Stable) franchises, sound capital and liquidity and improving profitability. Senior Short-term debt R-1 (mi
Slide 56: Key figures
APPENDIX: SOCIETE GENERALE: ADDITIONAL FINANCIAL INFORMATION dd KEY FIGURES Chg In EUR m Q3 15 Chg Q3 vs. Q2 9M 15 Q3 vs. Q3 Net banking income 6,364 -7.4% +8.3% 19,586 Operating expenses (3,978) -3.5% +1.5% (12,544) Net cost of risk (571) -21.1% -11.1% (1,908) Financial results Group net income 1,1
Slide 57: Investor relations and contacts
INVESTOR RELATIONS GROUP TREASURY ANTOINE LOUDENOT, MARION GENAIS, STÉPHANE LANDON, VINCENT ROBILLARD, KIMON KALAMBOUSSIS, MURIEL KHAWAM, ALEXANDRA VAYN, DAMIEN GRANGER, JONATHAN KIRK, ELODIE THEVENOT-BEJAOUI MARIE-ANNE TOULOUSE, BEATRICE BENHAMOU +33 (0) 1 42 14 47 72 investor.relations@socgen.com
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