Banca Mediolanum SpA · MIL:BMED
Banca Mediolanum SpA — Mediolanum — Q1 2005 Earnings Presentation
39 slides from Banca Mediolanum SpA's earnings presentation, May 11, 2005
Slide 1: Q1 2005 Reclassified Results
Q1 2005 Reclassified Results May 11, 2005
Slide 2: Slide 2
Slide 3: Net Inflows into Mutual Funds and Equity Funds
2 Net Inflows into Mutual Funds* € mn 2005 600 6000 400 4000 200 2000 0 0 Jan 00 July 00 Jan 01 July 01 Jan 02 July 02 Jan 03 July 03 Jan 04 July 04 Jan 05 -200 -2000 -400 -4000 -600 -6000 -800 -8000 Mediolanum: Q1 05 = 146 € mn Total Italian Industry: Q105 = 1.6 € bn -1000 -10000 * Including Manage
Slide 4: Quarterly Net Profit Comparison and Agenda
4 Quarterly Consolidated Net Profit Comparison € mn Q1 05 Q1 04 vs. vs. Q1 05 42.5 Q1 04 46.6 -9% Average Q2 04, Q3 04 & Q4 04 31.6 +35% +48% 5 Agenda Group Consolidated Results Core Business New Ventures Growth Strategy Plan: “4 Freedoms”
Slide 5: Group Consolidated Net Profit
Co ns oli da ted 6 Q1 2005 Reclassified Results Group Consolidated 7 Net Profit € mn Q1 05 Q1 04 Change Total revenues 826.2 689.9 +20% Total costs (778.1) (632.9) +23% Net investment income 9.8 5.3 +86% Profit before Tax & E.I. 57.8 62.3 -7% Extraordinary items 0.0 (0.1) n.s. Profit before Tax 57.8
Slide 6: Net Profit in Detail and Assets under Administration
ted da soli n Co 8 Net Profit in detail € mn Q1 05 Q1 04 Change Net Premiums written 715.9 569.8 +26% Commission income 73.1 78.1 -6% Bank revenues 31.6 38.0 -17% Other revenues/commissions 5.5 4.0 +39% Total Revenues 826.2 689.9 +20% Net change in reserves (644.6) (509.8) +26% Acquisition costs (58
Slide 7: Gross Inflows and Net Inflows
Co ns oli da ted 10 Gross Inflows € mn Q1 05 Q1 04 Change Gross premiums written 719.4 576.7 +25% Mutual funds & managed accounts 785.6 713.6 +10% Managed Savings 1,504.9 1,290.3 +17% Administered Savings (10.6) (7.7) +38% GROSS INFLOWS 1,494.3 1,282.6 +17% 11 Net Inflows € mn Q1 05 Q1 04 Change Lif
Slide 8: Sales Network
ted da soli n Co 12 Sales Network 31/03/05 31/03/04 Change Italy: Banca Mediolanum 4,796 4,978 -4% Spain: Fibanc (Mediolanum model) 411 407 +1% Spain: Fibanc (Traditional model) 66 64 +3% Germany: B.A. Lenz 95 83 +14% Full-Time Exclusive Advisors 5,368 5,532 -3% Italy: Partner Time 802 862* -7% Spai
Slide 9: Core Business Net Profit
Bu Co sin re es s 13 Q1 2005 Reclassified Results Core Business 14 Net Profit € mn Q1 05 Q1 04 Change Total revenues 791.6 655.9 +21% Profit before Tax & E.I. 65.1 70.4 -8% Extraordinary items 0.0 (0.1) -100% Profit before Tax 65.1 70.3 -7% Tax (14.9) (16.5) -10% NET PROFIT 50.3 53.8 -7%
Slide 10: Net Profit Performance Factors and Assets under Administration
re ss Co sine Bu 15 Net Profit Performance Factors Strong gross inflows in the life business Solid commission income, despite reduced performance fees Increase in net investment income 16 Assets under Administration € mn 31/03/05 31/03/04 Change Life reserves 10,571.9 9,097.0 +16% Mutual funds & man
Slide 11: Policyholders' Assets and Trend
Bu Co sin re es s 17 Policyholders' Assets € mn 31/03/05 31/03/04 Change Traditional Reserves 1,191.9 1,240.3 -4% Index-linked Reserves 4,624.5 3,936.6 +17% Unit-linked Reserves 4,755.4 3,920.1 +21% LIFE RESERVES 10,571.9 9,097.0 +16% 18 Policyholders’ Assets Trend € bn Decline in traditional reserv
Slide 12: Mutual Funds & Managed Accounts Assets
re ss Co sine Bu 19 Mutual Funds & M.A. Assets € mn 31/03/05 31/03/04 Change Equity funds 7,039.0 6,459.2 +9% Bond funds 1,860.7 1,834.8 +1% Monetary funds 843.4 822.9 +2% Total “unbundled" mutual funds 9,743.1 9,117.0 +7% “Elite" fund of funds 102.9 84.8 +18% o/w equity 80.6 50.5 +60% “Mix" account
Slide 13: Bank Deposits and Net Inflows
Bu Co sin re es s 21 Bank Deposits € mn 31/03/05 31/03/04 Change Cash under deposit 2,567.3 2,585.9 -1% Securities under deposit 1,739.0 1,720.4 +1% Repurchase agreements 111.6 173.3 -36% Subordinated loans 4.9 10.3 -52% BANK DEPOSITS 4,422.8 4,489.9 -1% 22 Net Inflows € mn Q1 05 Q1 04 Change Life p
Slide 14: Gross Inflows and Total Revenues
re ss Co sine Bu 23 Gross Inflows € mn Q1 05 Q1 04 Change Gross Premiums Written 695.1 549.1 +27% Mutual funds & managed accounts 349.2 451.8 -23% Managed Savings 1,044.3 1,000.9 +4% Securities 31.2 (145.4) -121% Cash (8.1) 48.7 -117% Repurchase Agreements (8.9) (7.5) +20% Administered Savings 14.1
Slide 15: Gross Premiums Written and Recurring Policies
Bu Co sin re es s 25 Gross Premiums Written € mn Q1 05 Q1 04 Change U-L Pension plans 20.8 14.6 +42% Pension plans: automatic increase in premiums* 8.0 7.6 +5% U-L Investment policies (Life Funds) 18.9 26.7 -29% Recurring Policies (AP) 47.7 48.9 -2% Trad/Group/Investment policies 3.3 3.7 -11% Unit-l
Slide 16: Adjusted Premium Income and Gross Inflows into Retail
re ss Co sine Bu 27 Adjusted Premium Income € mn Q1 05 Q1 04 Change Recurring policies* 39.7 41.3 -4% Single premium policies x 1/10 44.3 31.6 +40% NEW BUSINESS APE 84.0 72.9 +15% * excluding automatic increases in premiums 28 Gross Inflows into Retail Mutual Funds & Managed Accounts € mn Q1 05 Q1 0
Slide 17: Bank Accounts and Account Holders
Bu Co sin re es s 29 Bank Accounts & Account Holders 31/03/05 31/03/04 Change Active bank accounts 349,100 331,639 +5% Primary account holders (unduplicated) 784,900 780,700 +1% 30 Primary Account Holders 31/03/05 31/03/04 Change Life 602,500 588,300 +2% Mutual funds & managed accounts 275,800 286,4
Slide 18: Total Account Holders and Sales Network
re ss Co sine Bu 31 Total Account Holders 31/03/05 31/03/04 Change Life 602,500 588,300 +2% Mutual funds & managed accounts 419,500 437,000 -4% Bank 485,100 456,200 +6% Other 63,900 65,100 -2% Total account holders 920,800 918,700 +0% 32 Sales Network 31/03/05 31/03/04 Change Licensed Financial Advi
Slide 19: Profit by Business Line and Net Investment Income
Bu Co sin re es s 33 Profit by Business Line € mn Q1 05 Q1 04 Change Life insurance 40.6 34.8 +17% Mutual funds 18.4 19.8 -7% Bank business 5.2* 15.7 -67% Other operations 0.9 0.1 +820% PROFIT BEFORE TAX & E.I. 65.1 70.4 -8% * Includes “4 Freedoms" project expenses (5.6 mln) 34 Net Investment Income
Slide 20: Profit by Business Line and Commission Income
re ss Co sine Bu 35 Profit by Business Line € mn Q1 05 Q1 04 Change Life insurance 40.6 34.8 +17% Mutual funds 18.4 19.8 -7% Bank business 5.2* 15.7 -67% Other operations 0.9 0.1 +820% PROFIT BEFORE TAX & E.I. 65.1 70.4 -8% * Includes “4 Freedoms" project expenses (5.6 mln) 36 Commission Income € mn
Slide 21: Commission Income by Location
Bu Co sin re es s 37 Commission Income by Location as at 31/03/05 Management Entry 58% 5% Performance 2% Management 9% Entry 5% Performance 21% Italy Ireland 16% 84% 38 Profit by Business Line € mn Q1 05 Q1 04 Change Life insurance 40.6 34.8 +17% Mutual funds 18.4 19.8 -7% Bank business 5.2* 15.7 -6
Slide 22: Bank Revenues and Benefits Paid
re ss Co sine Bu 39 Bank Revenues € mn Q1 05 Q1 04 Change Interest Spread 12.8 13.3 -4% Securities 3.0 3.5 -13% Service fees on managed accounts 4.4 5.6 -21% Other services fees 5.4 9.7 -45% o/w mortgages fees 1.0 5.5 -81% Service Margin 12.8 18.8 -32% BANK REVENUES 25.6 32.1 -20% 40 Benefits Paid &
Slide 23: Surrenders and Surrenders of Investment Policies
Bu Co sin re es s 41 Surrenders* € mn Q1 05 Q1 04 Change Surrenders from Transformation 10.6 6.5 +64% Natural Surrenders* 73.7 58.6 +26% % of reserves 1.3% 1.2% +8% TOTAL SURRENDERS 84.3 65.1 +29% *excluding index-linked & group policies 42 Surrenders of Investment Policies € mn Q1 05 Q1 04 Change S
Slide 24: Surrenders of Pension Plans and Costs
re ss Co sine Bu 43 Surrenders of Pension Plans € mn Q1 05 Q1 04 Change Surrenders of Traditional Pension Plans 8.9 10.4 -15% % of reserves 1.0% 1.1% -10% o/w Natural Surrenders 3.9 5.9 -33% % of reserves 0.4% 0.6% -36% Surrenders of Unit-linked Pension Plans 37.7 15.7 +140% % of reserves 1.1% 0.5%
Slide 25: New Ventures Net Profit
Ve Ne ntu w res 45 Q1 2005 Reclassified Results New Ventures 46 Net Profit € mn Q1 05 Q1 04 Change Spain 0.3 0.3 n.s. Germany: Gamax 0.7 0.7 n.s. Germany: B.A. Lenz (2.3) (2.4) -2% Banca Esperia* 1.0 0.7 +43% Mediolanum Private & Others (0.2) (0.2) +0% NET PROFIT/LOSS (0.6) (0.9) -37% * Mediolanum G
Slide 26: Net Consolidated Effect and Banca Esperia Highlights
w es Ne ntur Ve 47 Net Consolidated Effect € mn Q1 05 Q1 04 Change Net profit/loss (0.6) (0.9) -37% Goodwill amortisation (5.8) (5.0) +16% Interest paid on investments (1.4) (1.3) +6% NET CONSOLIDATED EFFECT (7.8) (7.2) +8% 48 Banca Esperia Highlights (100%) € mn Q1 05 Q1 04 Change Profit before tax
Slide 27: Spain Net Profit and Gross Inflows
Ve Ne ntu w res 49 Spain Net Profit € mn Q1 05 Q1 04 Change Total revenues 33.5 33.2 +1% Total costs* (14.6) (13.7) +6% Net changes in reserves (18.5) (19.4) -5% Capital gain/loss 0.0 0.1 -86% Profit before Tax & E.I. 0.4 0.2 +159% Extraordinary items 0.0 0.0 n.s. Profit before Tax 0.4 0.2 +159% Tax
Slide 28: Spain Net Inflows and Assets under Administration
w es Ne ntur Ve 51 Spain Net Inflows € mn Q1 05 Q1 04 Change Life policies 17.7 18.1 -2% Mutual funds & managed accounts 13.9 (15.2) n.s. Managed Savings 31.6 2.9 n.s. Securities 0.5 5.9 -91% Cash (11.9) (8.0) +49% Administered Savings (11.4) (2.1) n.s. SPAIN NET INFLOWS 20.2 0.8 n.s. 52 Spain Asset
Slide 29: Spain Network and Gamax Highlights
Ve Ne ntu w res 53 Spain Network 31/03/05 31/03/04 Change Financial advisors 411 407 +1% (Mediolanum model) Commercial agents & employees 66 64 +3% (Traditional model) Part-time agents 119 89 +34% SPAIN TOTAL NETWORK 596 560 +6% 54 Gamax Highlights € mn Q1 05 Q1 04 Change Net profit 0.7 0.7 n.s. Ass
Slide 30: B.A. Lenz Highlights
w es Ne ntur Ve 55 B.A. Lenz Highlights € mn Q1 05 Q1 04 Change Net profit/loss (2.3) (2.4) -2% Assets under administration 48.5 177.3 -73% o/w managed savings 21.9 10.3 +113% Gross inflows (4.6) 104.2 -104% Net inflows (5.1) 103.6 -105% o/w managed savings 1.7 4.1 -57% o/w administered savings (6.8
Slide 31: "4 Freedoms" Project
G St row rat th eg y 56 57 “4 Freedoms” Project Major effort to generate a solid boost in no. of customers & advisors Strategic goal: Substantially increase the number of bank accounts Rationale: Customers that hold a bank account with us have 5 times the assets of those customers without a bank acc
Slide 32: "4 Freedoms" Project: Product
th ow y Gr ateg r St 58 “4 Freedoms” Project Product Simplicity & transparency All normal banking operations: free – ‘no asterisks’ Free cash withdrawals from all Italian ATM’s Free cash withdrawals/deposits at the more than 15,000 branches we have agreements with (P.O. & Banca Intesa) Monthly fee:
Slide 33: "4 Freedoms" Project: Media Communications
G St row rat th eg y 60 “4 Freedoms” Project Media communications New TV advertising campaign on-air since March 6th Centers on ‘Riflex account’: 45” & 30” spots Additional adverts feature ‘Riflex card’ & ‘Global Advising’ approach Locally run adverts focus on recruiting 61 “4 Freedoms” Project Medi
Slide 34: Mediolanum Tour Events and Other Marketing
th ow y Gr ateg r St 62 “4 Freedoms” Project Mediolanum Tour concept events Innovative forms of entertainment & contact Focusing on smaller & mid-sized towns to spread brand awareness at the grass-roots level Movie Premieres Theatrical Premieres “Sunday in Concert” “Caffé & Conto” etc. 63 “4 Freedom
Slide 35: Collective Sales Events and Network Incentives
G St row rat th eg y 64 “4 Freedoms” Project Collective sales events Maximize the use of collective sales efforts Thousands of events with existing customers & prospects 500 of our best managers & supervisors trained to speak & present at meetings Objective of these events is to present Riflex accou
Slide 36: "4 Freedoms" Preliminary Results: Bank Accounts
th ow y Gr ateg r St 66 “4 Freedoms” Preliminary Results No. of bank accounts opened April 2005 7,200 * March 2005 5,700 February 2005 5,600 Monthly Avg. 2004 3,900 * Approximately 50% are Riflex accounts 67 “4 Freedoms” Preliminary Results Net no. of bank accounts on hand Per month April 2005 4,400
Slide 37: "4 Freedoms" Preliminary Results: New Customers
G St row rat th eg y 68 “4 Freedoms” Preliminary Results No. of new bank customers April 2005 6,100 March 2005 4,900 February 2005 4,700 Monthly Avg. 2004 3,200 69 “4 Freedoms” Preliminary Results Response to TV adverts Market research indicates good response to TV advertising Confirmed by the numbe
Slide 38: Sales Network Recruitment
th ow y Gr ateg r St 70 Sales Network Recruitment Recruitment of trainees still sluggish Continued cautious stance towards acquisition opportunities: risks include inflating pay-out level and harming values & culture Key step: scheduled Collective Sales Events First feedback: number of candidates ex
Slide 39: Disclaimer and Investor Relations Contacts
72 Disclaimer This document has been prepared by Mediolanum S.p.A. for the sole purpose of providing information and presenting the Group’s strategies. The information, opinions, valuations and forecasts it contains have not been audited by any independent body; they may be altered at any time witho