Banca Mediolanum SpA · MIL:BMED
Banca Mediolanum SpA — FY2010 Earnings Presentation
49 slides from Banca Mediolanum SpA's earnings presentation, Mar 29, 2011
Slide 1: FY 2010 Results
1 March 29, 2011 FY 2010 RESULTS 2 Table of Contents FY 2010 Group Results pg. 3 FY 2010 Domestic Market Results pg. 15 FY 2010 Foreign Market Results pg. 47 FY 2010 Group Embedded Value pg. 53 Business Update pg. 66 Mediolanum Facts pg. 74
Slide 2: Group Adjusted vs. Statutory P&L
3 FY 2010 Group Results FY 2010 Group Adjusted vs. Statutory P&L 4 ‘Lehman Bros.’ Operation Impact € mn Adjusted 'LB' impact Statutory Net premiums written 9,123.5 9,123.5 Amounts paid & change in technical reserves (9,082.4) (9,082.4) Life revenues ex-commission 41.1 41.1 Entry fees 116.9 116.9 Man
Slide 3: Lehman Bros. Operation Dynamics and Income Statement
FY 2010 5 Group ‘Lehman Bros.’ Operation Dynamics € mn 2008 2010 Statutory Net Income 23.7 246.6 Financing from the two majority shareholders 107.6 + (22.9) = € 84.7 mn Adjusted net income ex-’Lehman Bros.’ 131.7 223.7 Final cost of ‘LB’ operation (covered by the 2 majority shareholders) Doris Group
Slide 4: Income Statement Salient Points
FY 2010 7 Group Income Statement Salient Points € mn Interest Spread & Fair Value negatively impacted by markets: €67 mn less than FY09 in Net Financial Income Growth in average NAV: +31% YoY thanks to strong Net Inflows into mutual funds as well as a positive market effect Increase in Commission In
Slide 5: Average Management Fees Trend and Assets under Administration
FY 2010 9 Group Average Management Fees Trend 2.00% 2.03% 2.04% 2.00% 2.03% 1.98% 1.99% 2004 2005 2006 2007 2008 2009 2010 * including U-L assets FY 2010 10 Group Assets under Administration € bn +14% Foreign markets 45.8 Domestic market 40.4 34.6 33.5 30.4 29.6 26.0 23.7 21.0 21.1 17.8 13.0 9.5 7.2
Slide 6: Assets under Administration and Net Inflows
FY 2010 11 Group Assets under Administration € mn 31/12/10 31/12/09 Change Life 15,068.7 14,988.8 +1% 'Freedom' Life Policies 5,025.3 4,571.8 +10% Asset management 19,509.2 15,759.2 +24% Banking* 7,195.6 5,785.8 +24% Consolidation adjustments (9,285.2) (8,167.0) +14% Banca Mediolanum 37,513.6 32,938
Slide 7: Dividend Proposal and Payout
FY 2010 13 Group Dividend Proposal Dividend per share 15.5 eurocent Total amount of dividends to be paid € 114 mn Dividend payout ratio 51%* * Calculated on Adjusted Net Income ex „Lehman Bros.‟ FY 2010 14 Group Dividend Payout € mn 88% 83% 70% 72% 69% 57% 60% 62% 62% 65% 50% 56% 55% 51% 51% 233 224
Slide 8: Domestic Market Income Statement
15 FY 2010 Results: Domestic Market FY 2010 16 Domestic Market Income Statement € mn - does not incorporate 'Lehman Bros.' operation FY10 FY09 Change Net premiums written 9,003.2 9,546.0 -6% Amounts paid & change in technical reserves (8,977.5) (9,457.1) -5% Life revenues ex-commission 25.6 88.9 -71
Slide 9: Domestic Income Statement by Quarter
FY 2010 17 Domestic Market Income Statement by Quarter € mn - does not incorporate 'Lehman Bros.' operation Q110 Q210 Q310 Q410 Life revenues ex-commission 5.2 9.6 3.6 7.3 Entry fees 28.1 32.4 22.8 29.3 Management fees 82.2 87.7 89.9 95.8 Performance fees 51.3 15.2 27.3 53.1 Banking service fees 21.
Slide 10: Domestic Assets under Administration, Equity Content, Net Inflows
FY 2010 Domestic Assets under Administration 19 Market Equity Content as at 31/12/2010 A.M. Products Managed Assets (including funds (Life & A.M. Products, underlying U-L policies) excluding ‘Freedom’ Life Policies) 52% 40% Equity* Equity* 22% 17% Flexible* Flexible* Total Assets (including Administ
Slide 11: Banca Mediolanum Total Net Inflows and Ranking
FY 2010 Domestic Banca Mediolanum 21 Market Total Net Inflows € mn 5,795 Total Net Inflows of which: 3,285 Managed assets 45* 4,571 (Life & Mutual Funds) 858* ‘Freedom’ Life assets 1,993 1,273 700 453 Administered assets -813 (Banking assets) FY09 FY10 * Third-party structured bonds: replace Index-l
Slide 12: Domestic Profit by Segment and Life Gross Premiums
FY 2010 23 Domestic Market Profit by Segment € mn - does not incorporate 'Lehman Bros.' operation FY10 FY09 Change Life 130.8 172.2 -24% Asset Management 107.7 78.8 +37% Banking 38.8 18.0 +116% Other 9.3 -2.5 n.s. PROFIT BEFORE TAX 286.6 266.5 +8% FY 2010 Domestic Life 24 Market Gross Premiums Writt
Slide 13: Life Policyholders' Assets and Commission Income
FY 2010 Domestic Life 25 Market Policyholders' Assets € mn 31/12/10 31/12/09 Change Traditional 1,331.5 1,374.5 -3% Index-linked 4,428.4 5,485.8 -19% Unit-linked pension plans 2,930.1 2,249.4 +30% Unit-linked endowment policies 3,736.0 3,384.9 +10% Unit-linked investment policies 2,642.6 2,494.1 +6%
Slide 14: Life Amounts Paid and Surrender Rate
FY 2010 Domestic Life 27 Market Amounts Paid in detail € mn - ex 'Freedom' Life Policies FY10 FY09 Change Claims 76.0 72.5 +5% Coupons 155.0 190.8 -19% Maturities 1,187.7 912.2 +30% o/w index-linked 931.8 686.2 +36% Surrenders 919.3 565.6 +63% AMOUNTS PAID 2,337.9 1,741.1 +34% FY 2010 Domestic Life
Slide 15: Life Natural Surrenders Trend and Index-Linked Maturities
FY 2010 Domestic Life – Natural surrenders trend 29 Market Whole-life U-L investment policies MSCI World Index in euro* % Natural surrenders as a % of avg. reserves 30 25.8 25 20 13.8 15 9.9 9.6 9.4 9.0 8.4 7.7 10 7.7 8.6 6.5 7.6 7.1 7.6 5.9 6.3 6.7 6.1 5.5 5.7 5.1 5 2.1 0 H1 H2 H1 H2 H1 H2 H1 H2 H1
Slide 16: Profit by Segment and Asset Management Gross Inflows
FY 2010 31 Domestic Market Profit by Segment € mn - does not incorporate 'Lehman Bros.' operation FY10 FY09 Change Life 130.8 172.2 -24% Asset Management 107.7 78.8 +37% Banking 38.8 18.0 +116% Other 9.3 -2.5 n.s. PROFIT BEFORE TAX 286.6 266.5 +8% FY 2010 Domestic Asset Management 32 Market Gross In
Slide 17: Asset Management Net Inflows and Assets
FY 2010 Domestic Asset Management 33 Market Net Inflows € mn FY10 FY09 Change 'Best Brands' 1,357.9 474.0 +186% 'Portfolio' (99.8) (73.1) +36% 'Elite' (3.9) (2.1) +83% Total Funds of Funds 1,254.3 398.8 +215% Italy-based Funds 309.1 365.6 -15% 'Challenge' 471.8 646.6 -27% Total 'unbundled' mutual fu
Slide 18: Ranking of Italian A.M. Groups by Mutual Funds Assets
FY 2010 Domestic Ranking of Italian A.M. Groups 35 Market by Mutual Funds Assets June 2007 Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Feb. 2011 1. Eurizon Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo 2. Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer 3. Crédit Agricol
Slide 19: Asset Management Commission Income and Profit by Segment
FY 2010 Domestic Asset Management 37 Market Commission Income € mn A.M. Products Total Commission Income Commission Income* FY10 FY09 Change FY10 FY09 Change Entry fees 112.6 79.9 +41% 112.6 79.9 +41% Management fees 161.3 108.9 +48% 355.5 264.8 +34% Performance fees 70.4 62.6 +13% 146.9 151.6 -3% T
Slide 20: Banking Administered Assets and Revenues
FY 2010 Domestic Banking 39 Market Administered Assets* € mn 31/12/10 31/12/09 Change Cash deposits 3,882.1 3,976.9 -2% Repurchase agreements 657.8 50.1 n.s. Mediolanum bonds 334.1 175.1 +91% Third-party structured bonds 833.5 42.5 n.s. Other securities under custody 1,488.3 1,541.2 -3% BANKING ADMI
Slide 21: Bank Accounts, Customers, Net Financial Income
FY 2010 41 Domestic Market Bank Accounts & Bank Customers Bank Accounts Bank Customers (primary account holders) 581,700 585,700 580,100 574,000 568,300 559,400 562,800 557,400 551,200 545,600 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 '09 '10 '10 '10 '10 '09 '10 '10 '10 '10 -2% YoY -2% YoY FY 2010 Domestic Net
Slide 22: Costs and Network of Family Bankers
FY 2010 43 Domestic Market Costs € mn FY10 FY09 Change Acquisition costs (304.8) (272.7) +12% 3rd party A.M. fees & Other commission expenses (14.1) (11.2) +26% Interbank service fees (12.7) (12.8) -1% G&A expenses + Amortisation & depreciation (318.0) (321.4) -1% Provisions for risks (15.4) (6.5) +
Slide 23: Licensed Financial Advisors Trend and Banca Esperia
FY 2010 Domestic Licensed Financial Advisors Trend 45 Market Mediolanum vs. Italian Industry 2007 – 2010 7000 30000 6000 25000 5000 20000 4000 Mediolanum: +19% 15000 Rest of Industry: -30% 3000 10000 2000 5000 1000 0 0 Source: Assoreti, Mediolanum FY 2010 Domestic Banca Esperia (100%) 46 Market High
Slide 24: Foreign Markets: Spain Highlights
47 FY 2010 Results: Foreign markets FY 2010 Foreign Spain 48 Markets Highlights € mn - does not incorporate 'Lehman Bros.' operation FY10 FY09 Change Net Income 0.6 (0.1) n.s. Assets under Administration 1,621.9 1,583.0 +2% o/w Managed Assets 991.2 930.3 +7% Gross Inflows 261.6 180.37 +45% o/w Manag
Slide 25: Spain Inflows by Distribution Model and AUA
FY 2010 Foreign Spain 49 Markets Inflows by Distribution Model € mn Mediolanum model Pre-existing Advisors Agents Total Managed Assets Gross Inflows 254.8 15.2 270.0 Net Inflows 84.4 (40.9) 43.5 Administered Assets Net Inflows (5.1) (3.3) (8.4) FY 2010 Foreign Spain 50 Markets Assets under Administr
Slide 26: Germany Highlights and Income Statement
FY 2010 Foreign Germany 51 Markets Highlights € mn FY10 FY09 Change Net Income before impairment (4.0) (6.8) -42% Impairment of CGU 'Germany' (7.4) Net Income (11.4) (6.8) +68% Assets under Administration 340.8 281.0 +21% o/w Managed Assets 317.2 268.4 +18% Gross Inflows 86.8 28.5 +204% Net Inflows
Slide 27: Group Embedded Value: MCEV-compliant Methodology
53 FY 2010 Results: Group Embedded Value FY 2010 54 Group EV MCEV-compliant Methodology Further details available in the supplementary disclosure on the Mediolanum website Compliant with CFO Forum MCEV Principles MCEV fully adopted for covered business (Life Insurance) Asset Management and Banking C
Slide 28: Embedded Value Trend and Group Embedded Value
FY 2010 55 Group EV Embedded Value Trend € mn +5% 3,233 3,122 3,164 VIF 3,072 2,957 Adjusted 2,493 2,514 shareholders’ equity 2,029 1,768 1,816 2,499 1,496 1,283 707 745 595 484 534 734 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 EEV MCEV* * MCEV for Life business; EEV for A.M. & Italian bank
Slide 29: Embedded Value Earnings and Components
FY 2010 57 Group EV Embedded Value Earnings € mn FY10 FY09 Change in EV over the year 161 675* Dividends paid 110 110 Other capital movements (4) (5) EV Earnings 267** 780 * with respect to FY08 figures restated according to MCEV principles **Accounting for the capital gains related to the „Lehman B
Slide 30: Operating Experience Variances and New Business Value
FY 2010 Group EV Earnings on Initial EV: 59 Operating Experience Variances € mn FY10 Performance fees 92 A.M. Persistency / paid-ups (10) Life Persistency / paid-ups (38) o/w Individual pension plans (16) o/w ‘Europension’ policies (20) o/w Investment policies (4) o/w Index-linked policies 2 Extraor
Slide 31: Life and A.M. New Business Margins (PVNBP)
FY 2010 Group EV Life New Business Margins (%PVNBP*) 61 Domestic Market € mn FY10 FY09 Change Term Insurance 6.7% 8.5% -21% Value of New Business - 'moment of sale' 1 1 -21% PVNBP 12 12 -0% Unit-linked 6.0% 5.0% +21% Value of New Business - 'moment of sale' 53 46 +16% PVNBP 883 932 -5% Index-linked
Slide 32: New Business Margins (APE)
FY 2010 Group EV Life New Business Margins (%APE*) 63 Domestic Market € mn FY10 FY09 Change Term Insurance 55.6% 69.8% -20% Value of New Business - 'moment of sale' 1 1 -34% Recurring premiums 1 1 -15% Single premiums 6 5 +25% APE 1 1 -2% Unit-linked 62.5% 49.2% +27% Value of New Business - 'moment
Slide 33: Business Update / Spain In-force & New Business Value
FY 2010 Group EV Spain 65 In-force & New Business Value € mn FY10 FY09 VIF Life Business 40 42 VIF A.M. Business 14 8 Value of In-force Business 54 50 Life New Business 8 12 A.M. New Business 2 (1) Value added by New Business 10 11 66 Business Update
Slide 34: Freedom Account Customer Assets Development (1)
Business 67 Update Our chief objective 2011 business is going smoothly towards our chief objective: to be the primary bank of the customer Today we estimate we are the primary bank for 34% of our bank customers This number is bound to increase rapidly: the strategy to put all of our attention on qua
Slide 35: Freedom Account Customer Assets Development (2)
Business Update ‘Freedom Account’ 69 Customer Assets Development (2) Avg assets as at 28.02.11 New „Freedom Account‟ customers who haven‟t benefitted from the attached high-yield policy (44% of total, € 359 mn in total assets) Mar '09 16% 3% 4% 77% € 14,293 75% 77% June '09 Month of account opening
Slide 36: Freedom Account Results and Net Inflows into Mutual Funds
Business 71 Update ‘Freedom Account’ Results March 2009 to February 2011 The „Freedom Account‟ is an extremely successful means to acquire new customers & assets Freedom Accounts as at 28.02.11 154,933 New accounts 53% Conversions 47% Total assets in Freedom Accounts € 6.80 bn Asset split: - non-int
Slide 37: Net Inflows into Equity Funds
Business 73 Update Net Inflows into Equity Funds* € mn 12000 600 8000 400 4000 200 0 0 Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 -4000 -200 Mediolanum Banking Group -8000
Slide 38: Mediolanum Group Structure and Integrated Structure
Mediolanum 75 Facts Mediolanum Group Structure as at 31.12.10 40.4% 36% Doris Group Fininvest Mediolanum 3.38% (directly & through Mediobanca Mediolanum Vita) 100% Banca Mediolanum Mediolanum Mediolanum Banking Group 51% Gestione Fondi 49% Mediolanum 50% 100% Vita Banca 51% Mediolanum Esperia 50% Ba
Slide 39: Integrated Retail Banking Model
Mediolanum Facts Our Integrated & Comprehensive 77 Retail Banking Model Automated Information TV-based Telephone services (Teletext) Services (VRU / SMS) Mobile devices Entire ATM (PDA / Smartphone) network Cash logistics Internet web site 15,000 3rd-party branches CUSTOMER High Low Banking added-va
Slide 40: Our Culture, Our Competitive Advantage
Mediolanum Facts Our Culture, 79 Our Competitive Advantage Our ability to generate positive inflows also in bear markets is explained by our customer-oriented culture especially embodied in two specific areas: The Investment strategy we advocate to our customers that provides solutions according to
Slide 41: Training & Communication: Corporate University
Mediolanum Facts Training & Communication: 81 Mediolanum Corporate University Inaugurated March 2009 Centralises our training know-how, in coordination with top universities, professors and individuals who are experts in the field Provides our Family Bankers & employees with a resource for life-long
Slide 42: Mediolanum Approach vs. Open Architecture
Mediolanum Facts The Mediolanum Approach vs. 83 Open Architecture „Best Brands‟ family of Funds of branded Funds unveiled in April 2008 Offers our customers the opportunity to further diversify their investments This is not the ‘Open Architecture’ approach It is impossible for a private investor to
Slide 43: Best Brands Collection and Multi-manager Series
Mediolanum 85 Facts ‘Best Brands’ Funds of Branded Funds The ‘Collection’ Series 8 Funds of multi-branded Funds created in collaboration with some of the world‟s best A.M. companies (2008) Each fund can invest in funds managed by a set of renowned partner A.M. companies, whose brand names are active
Slide 44: Product Line Development and Freedom Account
Mediolanum Facts Product line development: 87 Italy-based funds April 2010 Optimisation & consolidation of 22 existing funds & FoFs… …into 5 new funds, o/w 4 in the „Flexible‟ category: MEDIOLANUM FLESSIBILE ITALIA MEDIOLANUM FLESSIBILE GLOBALE MEDIOLANUM FLESSIBILE STRATEGICO MEDIOLANUM FLESSIBILE
Slide 45: Net Profit and Embedded Value
Mediolanum 89 Facts Net Profit € mn 233 224 217 224* 212 141 131* 129 115 103 88 82 75 54 60 38 49 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * 2008 & 2010 Adjusted Net Income ex „Lehman Bros.‟ Mediolanum 90 Facts Embedded Value € mn +5% Value of In-Force bu
Slide 46: MED.MI Total Return Index and Family Banker Network
Mediolanum Facts MED.MI 91 Total Return Index* 1400 1200 1000 800 600 400 200 0 * includes dividend reinvestment, June 3, 1996 – December 27, 2010 source: Datastream Mediolanum Facts Banca Mediolanum 92 Family Banker Network Licensed Advisors 5,040 5,077 4,945 4,772 4,114 4,052 4,048 3,978 4,011 3,8
Slide 47: Banca Mediolanum Customers and Bank Accounts
Mediolanum Facts Banca Mediolanum 93 Customers Primary account holders (thousands) 921 897 894 915 840 761 778 785 798 715 619 465 495 386 410 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mediolanum Facts Banca Mediolanum 94 Bank accounts Thousands March 2005 ‘4Freedoms
Slide 48: Total Net Inflows Trend and Disclaimer
Mediolanum 95 Facts Total Net Inflows Trend € mn – Domestic Market 8000 Banca Esperia (Mediolanum‟s share) Banca Mediolanum 1,144 6000 697 5,795 4000 203 3,437 3,285 2000 3,225 3,059 673 1,106 2,610 557 797 351 1,544 1,546 1,805 1,689 1,265 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -2
Slide 49: Investor Relations Contacts
97 Investor Relations Contacts e-mail: investor.relations@mediolanum.it Alessandra Lanzone tel.: +39-02-9049-2039 e-mail: alessandra.lanzone@mediolanum.it Lisa Maxon tel.: +39-02-9049-2997 e-mail: lisa.maxon@mediolanum.it Luca Mirabelli tel.: +39-02-9049-2721 e-mail: luca.mirabelli@mediolanum.it Liv