Bff Bank Spa · MIL:BFF
Bff Bank Spa — Banca Farmafactoring S.p.A. (BFF Banking Group) — Jefferies 2017 – Specialty Finance Summit
21 slides from Bff Bank Spa's conference presentation, June 2017
Slide 1: Group overview
Group overview Jefferies 2017 – Specialty Finance Summit June 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 €240bn 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 Italy, Iberia and CEE Endemic Delay in Payments in the Public Sector €240bn of Public Sector expenditures in the countries we operate in(4)
Slide 5: BFF’s Services Offered
BFF’s Services Offered General Overview Three business lines: Focus on Non-recourse Factoring – Revenues Model Pay Purchase Price Collect Cash − Non Recourse Factoring (“Purchased”) (Funded business, 82% of Suppliers Debtors gross revenues(1)) Sell Receivables Submit Receivables • Healthcare + - +
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 Private equity Downgrade of Downgrade Downgrade of ofItalian ITA Gov. Gov. Downgrade Downgrade ofto BBB Italian Downgrade Downgrade to of Itali
Slide 8: We Operate in an Underpenetrated €240bn Market, with Leadership Position in Many Geographies…
We Operate in an Underpenetrated €240bn Market, with Leadership Position in Many Geographies… Key Considerations BFF Positioning Total Public Expenditure in Goods and Service (€bn) Non-recourse Factoring outstandings with PA & NHS (€7.3bn) 2019E Total potential market is the public sector expendit
Slide 9: …With a Growing Business, Increasingly Diversified…
…With a Growing Business, Increasingly Diversified… Key Considerations Customer Loans Evolution (€m) BFF ex Magellan (€m) 2,531 Significant customer loans growth with 489 higher contribution from less capital intensive segments (non NHS public 1,962 2,052 1,880 2,043 administration) 1,555 1,137 2,
Slide 10: …And with Positive Trend in Revenues…
…And with Positive Trend in Revenues… Key Considerations Adjusted Net Banking Income(1) (€m) Net banking income adjusted increased by 8% in 2016 to €175m (including 175 Magellan and €2m financing costs): 162 (2) 20 − C.11% increase of net banking 157 20 income for BFF only (net of one-off and fina
Slide 11: …With a Fortress Balance Sheet and Low Risk Profile…
…With a Fortress Balance Sheet and Low Risk Profile… Key Considerations Breakdown of Balance Sheet 1Q17 (€m) A fortress balance sheet 4,924 4,924 Other 161 193 Other − Conservative asset / liability management 515 AFS approach: loan book funding duration higher REPOs Liquid government bonds than t
Slide 12: …Backed by a Strong Capital Position…
…Backed by a Strong Capital Position… Key Considerations Total Capital Ratio - Banking Group ex TUB Capital Ratio RWA 1,788 Robust capital position maintained also after the cash acquisition of Magellan and the full 2016 net income pay-out 20.9% 1.3%: free capital generated in 1Q 19.6% Banking G
Slide 13: …With a Diversified Funding Base
…With a Diversified Funding Base Key Considerations Available Funding(1) (€m) Liquidity 351% 391% 502% 360% A diversified and flexible funding base mainly Coverage Ratio(2) (4) driven by deposit gathering and wholesale (4) 3,216 3,152 financing: (3) 229 (3) 219 − €838m deposits gathered as of Marc
Slide 14: Potential for Further Funding Cost Optimization
Potential for Further Funding Cost Optimization Key Considerations Interest Expenses (€m) Cost of Funding(1) BFF ex Magellan 4.9% 3.4% 2.2% 1.7% Vs. 4.4% Reduction in cost of funding continued with an average cost Magellan of funding of 2.0% in 1Q17 Cost of 37 Funding in From 6th June 2017, 12m
Slide 15: Invested in the Business while Maintained Strong Efficiency
Invested in the Business while Maintained Strong Efficiency Key Considerations Operating Costs Adjusted for Extraordinary Items (€m) Cost / Income adjusted(1,2) 30% 32% 30% 32% BFF heavily invested over the last three years in infrastructure 56(3) and people to support growth 7 Tot. Adj. Opex: €56
Slide 16: High Visibility of Future Revenues from LPI
High Visibility of Future Revenues from LPI Key Considerations LPI Stock Evolution (Excl. Magellan) (€m) Cash Accounting Accrual Accounting 522 The full impacts on BFF’s P&L originated by the LPIs and 547 496 427 460 related to the significant growth of purchased receivables 386 186 over the last
Slide 17: High Profitability and Significant Dividend Capacity...
High Profitability and Significant Dividend Capacity... Key Considerations Net Income adj(1) (€m) RoTE adjusted combined(1) 26% 22% 28% 37% 28% 36% Almost doubled net income in the last 4 years to €88m (incl. Magellan) 88(4) (2) 72(3) 10 57(2) 47(2) Significantly improved return on capital thank
Slide 18: ... Able to Support future Growth and Dividend
... Able to Support future Growth and Dividend RoTE: 36%(1) Total Capital ratio: 19.6% Target Total Capital ratio: 15% 1 Invested in the Significant investment in infrastructure business for and expanded employee base to support business expansion Highly capital generative model able to self fund gr
Slide 19: BFF 2020 “Strategic Target”
BFF 2020 “Strategic Target” 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 suppliers
Slide 20: Appendix
Appendix bffgroup.com 20
Slide 21: 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 for more than 12 years Paid only if budget achieved, zero otherwise Yearly management 50% in shares or stock options for risk takers bonus
Banca Farmafactoring S.p.A. (BFF Banking Group) — Jefferies 2017 – Specialty Finance Summit on 6ix