Banca Generali S.p.a. · MIL:BGN
Banca Generali — H1 2007 Earnings Presentation
30 slides from Banca Generali's earnings presentation, Jul 30, 2007
Slide 1: 2007 First Half Results
2007 First Half Results Giorgio Girelli, CEO Milan, July 30, 2007
Slide 2: Today's Agenda
Today’s Agenda ● WHERE WE STAND TODAY: 9 1H 2007 Results 9 Key Issues: Growth, Profitability, Sustainability 9 Key Drivers: Products, Network, Cost Control LOOKING FORWARD: 9 Changing Scenario 9 New Initiatives to Create Value ● Back-up 2 2 Strictly Private and Confidential
Slide 3: 1H 2007 Results at a Glance
1H 2007 Results at a Glance (€ m) 2Q 06 (LfL) 2Q 07 1H 06 (LfL) 1H 07 104.6 +14.7% 90.3 +15.8% 52.9 Total 46.1 Total Income Income -0.3% -0.5% 62.9 62.6 Operating Operating Expenses 32.7 32.6 Expenses 45.3 31.6 +43.3% 22.1 +42.6% EBITDA EBITDA 15.5 Net Net Profit Profit 18 x 17 x 10.1 5.4 0.6 0.3 No
Slide 4: 1H 2007 - Consolidated Profit & Loss
1H 2007 - Consolidated Profit & Loss 1H 06 FY 2006 (€ m) 1H 07 % Chg (LfL) (LfL) NET INTEREST INCOME 12.2 20.2 65.9% 29.1 Commission income 129.6 145.4 12.2% 279.9 Commission expense -57.1 -67.1 17.5% -129.5 NET COMMISSIONS 72.4 78.3 8.1% 150.4 Net income (loss) from trading activities -14.3 3.5 -5.
Slide 5: 2Q 2007 - Consolidated Profit & Loss
2Q 2007 - Consolidated Profit & Loss 2Q 06 (€ m) 2Q 07 % Chg 1 Q 07 (LfL) NET INTEREST INCOME 6.6 10.4 57.6% 9.8 Commission income 69.4 71.0 2.2% 74.4 Commission expense -31.0 -32.9 6.0% -34.2 NET COMMISSIONS 38.4 38.1 -0.8% 40.2 Net income (loss) from trading activities -18.5 1.8 1.7 } n. m. Divide
Slide 6: Key Issues: 1 / Continuing the Growth
1H 07 Results - Key Issues: 1 / Continuing the Growth 2006 2006 1H 1H 07 07 16.7% 16.7% 12.8% BG Group: 2,372 12.8% 12.8% 12.8% 11.1% market leader Net Net Inflows Inflows 1,820 1,805 11.1% 10.7% 10.7% 18.9% 18.9% in Net Inflows in (€ (€ m) m) 1,573 1,509 FY 05, FY 06 and 1,203 17.6% 17.6% 13.7% 13.
Slide 7: Key Issues: 2 / Increasing Profitability
1H 2007 Results – Key Issues: 2 / Increasing Profitability AUM AUM Profitability Profitability (1) (1) EBITDA EBITDA (2) (2) (€ m) 69.8 + 0.09 p.p. 1.34% 1.25% 34.8 + 0.07 p.p. + 0.06 p.p. 1.23% 1.29% 1.36% 30.8 59.3 45.3 2005 2006 1H 07 2005 2006 1H 07 AUM profitability excluding performance fees E
Slide 8: Key Issues: 3 / Sustainability as Strategic Pillar
1H 2007 Results – Key Issues: 3 / Sustainability as Strategic Pillar Breakdown Breakdown of of Net Net Banking Banking Income Income Breakdown Breakdown of of Gross Gross Commissions Commissions (€ m) + 12% + 16% 129.6 145.4 90.3 104.6 Net Interest Income Front Fees 19% 20% 14% 19% Net Commissions 8
Slide 9: Key Drivers: 1 / Appealing Product Range
1H 2007 Results – Key Drivers: 1 / Appealing Product Range Top Top performing performing in-house in-house products products with with Best-in-class Best-in-class products products offered offered to to BG BG clients clients sustainable sustainable prices prices weighted average performance avg TER
Slide 10: Key Drivers: 2 / Network Upgrade
1H 2007 Results – Key Drivers: 2 / Network Upgrade No. No. of of FAs FAs IN/OUT IN/OUT @ @ 1H 1H 07 07 (a) (a) BG BSI Total IN OUT* IN OUT* IN OUT* • Recruitment of high-profile Top (>10 € m) 10 5 22 2 32 7 professionals still strong in 2Q 07 Middle (4-10 € m) 15 14 3 18 14 <4€m 12 42 12 42 • Networ
Slide 11: Key Drivers: 3 / Cost Control
1H 2007 Results – Key Drivers: 3 / Cost Control Operating Operating Expenses Expenses Breakdown Breakdown Cost/Income Cost/Income ratio ratio (1) (1) (€ m) - 0.3% 66.6 66.4 Staff 39% 42% -8.1 p.p. -5.3 p.p. 70.1% 55% 62.0% G&A expenses 56.7% 53% Amortisation 6% 2005 2006 1H 07 5% 1H 06 (LfL) 1H 07 •
Slide 12: Changing Scenario: The Mifid Legislation
Changing Scenario: The Mifid Legislation A dramatic change in the European Financial Services Industry MIFID MIFID New New rules rules A new way for the relationship between clients and Financial Services providers Consultancy vs. Execution MIFID MIFID Two Two main pillars main pillars Transparency
Slide 13: Successful Launch of New Products…
Successful Launch of New Products… BG Target Launched: May 14, 2007 (Protected Capital Discretionary • Alfa (Best in class of International markets) At June 30, 2007 Æ € 135 m Accounts which offer potential • Cinindia (the growth of Indian and Chinese markets) upside from equity market) Since launch
Slide 14: …and Marketing Campaigns
…and Marketing Campaigns “Cambio Banca” leverages on BG banking platform and recent legislation (Bersani Decree) to increase penetration of banking Non Managed Assets products and the client’s share of wallet. BG Target “Ciak …si replica!” is geared to optimise the clients’ asset allocation accordin
Slide 15: New Initiatives to Create Value
New Initiatives to Create Value Requested Requested authorization authorization for for aa Management Management Company Company in in Luxembourg Luxembourg to to manage manage BG BG Sicav Sicav July 06 – June 07 BG Sicav’s AUM 1,478 91 17 99 30 63 770 272 20 85 - 11 40 17 - 15 July 06 2006 2006 200
Slide 16: Banca Generali: Built around the Future
Banca Generali: Built around the Future Positive market environment for “Advice” suppliers Innovative business model to exploit the new market trends Proven asset gathering capabilities High-quality distribution segmented according to clients’ needs Rapid conversion of assets to value added products
Slide 17: Back-up
Back-up 17 17 Strictly Private and Confidential
Slide 18: Italian Market: Net Inflows by Distribution Channel
Italian Market: Net Inflows by Distribution Channel (€ bn) 56.4 20.0 17.0 9.7 9.8 9.3 7.4 4.8 2.6 2.5 1.1 (0.9) (3.2) (8.9) (9.5) (19.9) (21.1) (25.3) 2000-2006 2000 2001 2002 2003 2004 2005 2006 June 2007 Cumulative Net Inflows FAs Network Net Inflows Other Distribution Channels (i.e. Bank Outlets.
Slide 19: BG Group: Net Inflows and AUM
BG Group: Net Inflows and AUM Net Net Inflows Inflows Assets Assets Under Under Management Management (€ m) FY 1Q 2Q 1H Dec March June 2006 2007 2007 2007 2006 2007 2007 Mutual Funds 169 329 156 485 7,965 8,365 8,735 Discretionary Accounts 608 -21 7 -14 5,143 5,142 5,155 Managed Assets 777 308 163 4
Slide 20: 1H 2007 - Consolidated Profit & Loss
1H 2007 - Consolidated Profit & Loss (€ m) 1H 06 1H 07 % Chg FY 2006 NET INTEREST INCOME 10.4 20.2 94.6% 27.3 Commission income 121.4 145.4 19.8% 271.2 Commission expense -56.8 -67.1 18.3% -128.6 NET COMMISSIONS 64.6 78.3 21.1% 142.6 Net income (loss) from trading activities -15.4 3.5 -6.4 } 34.4% D
Slide 21: 2Q 2007 - Consolidated Profit & Loss
2Q 2007 - Consolidated Profit & Loss (€ m) 2Q 06 2Q 07 % Chg 1Q 07 NET INTEREST INCOME 5.6 10.4 85.5% 9.8 Commission income 65.9 71.0 7.7% 74.4 Commission expense -30.8 -32.9 6.7% -34.2 NET COMMISSIONS 35.0 38.1 8.7% 40.2 Net income (loss) from banking activities -19.2 1.8 1.7 } n. m. Dividends 19.6
Slide 22: BG Group: Business Model
BG Group: Business Model FAs & PBs Asset Clients Wealth Banking Platform Gathering Management Asset Management Private Trust Services Affluent Branches Web Contact Center Insurance Products Generali Group Clients OpenMulibrand Architecture Mulibrand Mulibrand Third part ≅ 960 Pro Financial Advice Se
Slide 23: BG Group: Banking Platform
BG Group: Banking Platform Banking Banking branches branches Highly Highly competitive competitive conditions conditions in in Current Accounts* Current Accounts in in all main cities… all main cities… Interest Fees ATM Trading rates withdrawal fees Privilege 0.15% 80% Euribor 2.5 € / month Free 0.5
Slide 24: BG Group: Open Architecture
BG Group: Open Architecture AUM at Asset Life Administered Total 30/06/2007 Management Insurance Funds (€ bn) (€ bn) (€ bn) (€ bn) Tot AuM as of December 06 (€24bn) 13.9 13.9 4.6 6.7 25.2 of which Equity 8.1 ≅ 130 Generali Group Products In-House Products 4.7 34% In-house Generali Group Generali Gro
Slide 25: BG Group: Strategic Targets - Main Guidelines
BG Group: Strategic Targets - Main Guidelines • Huge Market Opportunity • Net Inflows Generation • Strong and Sound Banca Generali’s Business Model • Assets’ Growth 9 Sound and Costant Company’s • Progressive Network Enhancement Growth • Increasing AUM Profitability • New Produts launch • Tight Cost
Slide 26: BG Group: Targets to 2009 – Earnings Growth
BG Group: Targets to 2009 – Earnings Growth 2006 2006 2009 2009 Target Target 09 09 vs. vs. 06 06 Net Net Inflows Inflows (€ (€ bn) bn) 2.4 6 € bn n.a. cumulated in 07-09 AUM AUM (€ (€ bn) 23.7 30-31 bn) + 9% CAGR* Gross Gross Margin Margin on on AUM AUM 1.34% 1.55%-1.60% + 0.24 p.p.* Cost/Income Co
Slide 27: What's Next
What’s Next •• Tuesday Tuesday October October 30, 30, 2007: 2007: 10:00 10:00 am am CET CET Board Board Meeting Meeting to to approve approve 3Q 3Q 2007 2007 results results 3:00 3:00 pm pm CET CET Conference Conference Call Call 27 27 Strictly Private and Confidential
Slide 28: Contacts
Contacts Investor Investor Relations: Relations: Paola Paola Buratti Buratti Tel Tel +39 +39 02 02 6076 6076 5548 5548 Fax Fax +39 +39 02 02 6682 6682 854 854 E-mail E-mail investor.relations@bancagenerali.it investor.relations@bancagenerali.it Institutional Institutional Website: Website: www.banca
Slide 29: Glossary
Glossary • Assets Under Management (AUM): Mutual funds, managed fund and share portfolios, life insurance policies and administered assets • AUM Profitability: (Gross Commissions + Net Interest Margin) / Average AUM • Cost Income ratio: (Total Administrative Expenses + Other Expenses – Other Income
Slide 30: Disclaimer
Disclaimer It is hereby declared that pursuant to par. 2 art. 154-bis of Legislative Decree 58/98 the accounting reporting contained in this communication corresponds to the records, books and accounts of the Company. The Manager in charge of preparing the Company’s financial reports. G. Fancel, CFO