the ubs italian financial services conference · the ubs italian financial services conference...
TRANSCRIPT
The UBS Italian Financial Services Conference
Giorgio Girelli, CEO Milan, February 1, 2007
Built around the future
Strictly Private and Confidential 2 22
Today’s Agenda
Market Very Favorable Long-term Outlook
Business Model and Operative Platform Fitting with Market TrendsStrategy
Sustainable and Non-volatile Increase of ProfitabilityDelivery
Market Very Favorable Long-term Outlook
Strictly Private and Confidential 3 33
The Savings Market in Italy: Increasing Demand for Professional Advice
Asset Management Flows (€ bn)(a)Asset Management Flows (€ bn)(a)
1. Ageing of Italian population
2. Unsustainable pressure on public pension system
3. Long-term savings as alternative to public pensions
4. Increasing demand of affluent clients for financial advice
(a) Inflows into (i) Mutual funds; (ii) SICAVs (Investment Company with Variable Capital, ICVC)Source: Elaborations based on Assogestioni, Assoreti data
56.4
20.0
2.6 2.5
9.8 9.37.4
(21.1)
9.7
(3.2)
(8.9)
17.0
(9.5)
(0.9)
(25.3)
4.8
2000 -2006
Cumulative
2000 2001 2002 2003 2004 2005 2006
Net Inflows FAs Network (€bn)Net Inflows Other Distribution Channels (i.e. Bank Outlets. Post Offices) (€bn)
What is needed to succeed
What is needed to succeed
• Focused and long-term strategies
• Brand awareness
• Objective consulting
• Capacity to deliver superior long-term performances
Strictly Private and Confidential 4 44
Today’s Agenda
Market Very Favorable Long-term Outlook
Business Model and Operative Platform Fitting with Market TrendsStrategy
Sustainable and Non-volatile Increase of ProfitabilityDelivery
Business Model and Operative Platform Fitting with Market TrendsStrategy
Strictly Private and Confidential 5 55
Insurance Products (a)
Asset Gathering
Wealth Management
PrivatePrivate AffluentAffluent Generali Group Clients
Generali Group Clients
Trust ServicesAsset Mgmt.
A Business Model Focused on the Key Drivers of the Market
FAs: 236AuM (€ bn): 6.2
FAs: 1,648AuM (€ bn): 14.6
FAs: 2,722AuM (€ bn): 2.9
(a) La Venezia is 100% owned by Assicurazioni Generali
Strictly Private and Confidential 6 66
A Fast-Growing Company…
Banca Generali’s Mission: Providing high quality and sophisticated advice to affluent and high net worth individuals
Banca Generali’s Mission: Providing high quality and sophisticated advice to affluent and high net worth individuals
• 1997: Banca Generali is founded• 2000: Merger of Prime into Banca Generali• 2001: Acquisition of Altinia from Alleanza and INA Sim from INA• 2002: Merger of FA networks of Prime, Altinia and INA Sim into Banca Generali
• 2003: Start-up of Simgenia and acquisition of Banca Primavera from Banca Intesa
• 2005: Acquisition of Intesa Fiduciaria Sim from Banca Intesa• 2006: Acquisition of BG Sgr from Assicurazioni Generali and of
Banca BSI Italia and S.Alessandro Fiduciaria from BSI SA
Mkt AuM(€ bn)
Mkt AuM(€ bn)
BG AuM(€ bn)
BG AuM(€ bn)
7.4(a) 153.8
22.8(b) 217.8(b)
+208% +42%
Building up a successful business modelBuilding up a successful business model
(a) Pro-forma including Prime, Altinia, INA Sim(b) As of September 2006Source: Company and Assoreti data
Strictly Private and Confidential 7 77
…Becoming a Top Player in a Few Years
AuM MarketShares
September2006(€ bn)
Tot AuM €218 bn
Top 5 Players: 70%Top 5 Players: 70% Other Players: 30%Other Players: 30%
11.9%11.9%10.4%10.4%
7.2%7.2%
29.9%29.9%
65.1
3.8%3.8%
22.8
Banca Generali
5.7%5.7%4.0%4.0%
Simgenia Banca BSI Italia
10.3%10.3%
3.9%3.9%3.9%3.9%
2.6%2.6%1.8%1.8%
1.3%1.3%1.1%1.1%
1.1%1.1%1.0%1.0%
2.22.42.42.94.05.88.58.58.612.4
Azimut
F&F BankFineco
Credit Suisse
Euro Mobil.Bipielle
MPS B.Per.
Sella ConsultCredem
Banca Sara
25.922.3
15.7
Fideuram
MediolanumBanca
GeneraliRasbank
Xelion
8.3
Others
Source: Elaborations based on Assoreti data
AuM MarketShares2000(€ bn)
Tot AuM €154 bn
Top 5 Players: 64%Top 5 Players: 64% Other Players: 36%Other Players: 36%
10.0%10.0%
8.3%8.3%6.6%6.6%
6.6%6.6%
32.2%32.2%
3.3%3.3%
4.7%4.7%
49.5
3.2%3.2%
2.7%2.7%
2.7%2.7%2.6%2.6%
2.3%2.3%1.9%1.9%
1.7%1.7%1.6%1.6%
1.6%1.6%1.4%1.4%
0.9%0.9%0.9%0.9%
0.9%0.9%0.7%0.7%
0.6%0.6%2.6%2.6%
15.312.7
10.2 10.2
Fideuram
Mediolanum
Dival RasSPI In
vF&F
2.22.53.03.54.04.24.24.95.07.3
Azimut
Prime
ING
Intesa Italia
BNL Inv.
UCI Sim
Credit Suisse
Bipop
Gener comit
3.90.91.11.31.41.42.42.6
Area Banca
Euromobil
Sella Consult
Ras Inv.INA Sim
AltiniaBipielle
Others
Banca 121
Strictly Private and Confidential 8 88
Trends and NeedsTrends and Needs Banca Generali’s PositioningBanca Generali’s Positioning
1. Clients and FAs’ segments have different and specific needs
3. Real financial advice requires objective consulting
4. Increasing harmonisation with European trends in services and pricing
1. Segmented distribution channels to provide tailored advice to clients and dedicated structure to FAs
3. The broadest offer relying on the most advanced open architecture model
4. Products and services fully compliant with Italian and European requirements
5. Need of scale to grow and to consolidate
5. Fully scalable structure with integration track record to support AuM growth
Banca Generali: Built around Future Markets and Clients’ Needs
Trends and NeedsTrends and Needs Banca Generali’s PositioningBanca Generali’s Positioning
1. Clients and FAs’ segments have different and specific needs
3. Real financial advice requires objective consulting
4. Increasing harmonisation with European trends in services and pricing
1. Segmented distribution channels to provide tailored advice to clients and dedicated structure to FAs
3. The broadest offer relying on the most advanced open architecture model
4. Products and services fully compliant with Italian and European regulations
5. Need of scale to grow and to consolidate
5. Fully scalable structure with integration track record to support AuM growth
2. Skilled and experienced FAs are a pre-requisite for effective financial advice
2. Upgrade of FAs network (“not in the number of FAs, but in the quality of FAs”)
Strictly Private and Confidential 9 99
1. Segmented Distribution to Provide Tailored Advice
Customer’s NeedsCustomer’s Needs
High NetWorth
High NetWorth AffluentAffluent
Generali Clients
Generali Clients
Financial Advisor’s NeedsFinancial Advisor’s Needs
Private BankerPrivate Banker
Financial ConsultantFinancial
Consultant
Segmented DistributionSegmented Distribution
AuM per FA (€ m)
AuM per FA (€ m)
Client TargetClient Target
Org. StructureOrg. Structure
Private Affluent Generali Group Clients
Flat Pyramidal
(3 managerial layers) Insurance-likeOrganisation
26.3 8.9 1.1
Strictly Private and Confidential 10 1010
2. Increasingly Efficient Financial Advisor Network
AuM / Financial Advisors(a)AuM / Financial Advisors(a)
5.4 6.47.9
11.0
2003 2004 2005 2006
26.3
8.9
2006
BSI
BG Network
(a) Excluding Financial Advisors and AuM of Simgenia
# of Financial Advisors(a)# of Financial Advisors(a)
2361,648
2,502 2,220 2,006 1,884
2003 2004 2005 2006
2006
BSI
BG Network
Strictly Private and Confidential 11 1111
3. Wide Offer Relying on Open Architecture and Banking Services
(a) Includes mutual funds, SICAV, GPM and GPF Source: Research published on “Il Mondo”, January 26, 2007
Weighted Average Performance
14.610.58Mediolanum Gestione Fondi Sgr8.732.79Fideuram Investimenti Sgr8.312.98Anima Sgr
10.695.44BG Sgr9.895.46Azimut Sgr
20052006(%)
Tot AuM as of December 06 (€24bn)Asset
Management(a)Life
InsuranceAdministered
Funds
4.6 6.013.113.1
of which Equity 7.5
In-House Products 4.7 36%
Generali Group Products 2.9 22%
`Third Parties Products 5.5 42%
TotalAUM
23.7
(All data in € bn)
854 Products16 Third Parties
Strictly Private and Confidential 12 1212
4. Products/Services Offer Compliant with Italian and European Regulations
1. European regulation on performance fees
1. European regulation on performance fees
BG fully compliant with European regulation (IOSCO standards) since January 2006BG fully compliant with European regulation (IOSCO standards) since January 2006
3. Objective consulting on the whole client’s wallet
3. Objective consulting on the whole client’s wallet
• Open Architecture • Powerful Banking platform • Financial Advice contract
(to be launched in Feb. 2007)
• Open Architecture • Powerful Banking platform • Financial Advice contract
(to be launched in Feb. 2007)
4. European pricing levels4. European pricing levelsFull alignement in: • Mutual Funds • Life Insurance • Banking Services
Full alignement in: • Mutual Funds • Life Insurance • Banking Services
Some Examples:
2. Third-parties in wrapper products2. Third-parties in wrapper products GPF MultiModusGPF MultiModus
Strictly Private and Confidential 13 1313
5. Fully Scalable Business Platform
Business PlatformBusiness Platform
AuditAudit
Human ResourcesHuman
Resources
LegalLegal
TreasuryTreasury
CreditCredit Planning & Control
Planning & Control
Operations
AccountingAccounting
Centralised Services
Outsourced Services
IT
Data Entry Back Office
Services Provided to…
• Key internal functions fully integrated after recent acquisitions
• Current platform ready to sustain further growth
• 85% of cost base is fixed
Strictly Private and Confidential 14 1414
Banca Generali’s Robust Platform Leading to Resilient Net Inflows …
Note: Total inflows to mutual funds, SICAVs, GPMs, GPFs, insurance and administered funds(a) Net inflows from Banca Primavera starting from October 2003(b) Banca BSI Italia since July 2006Source: Elaborations based on Assoreti data
Banca Generali
Simgenia
BSI Italia (b)
Banca Primavera
Integration (a)Prime. Altinia. INA Sim
Integration
Market’s Net Inflows
(€m)
Market’s Net Inflows
(€m)
Banca Generali’sNet Inflows
(€m)
Banca Generali’sNet Inflows
(€m)
CAGR 00-06-12%
CAGR 00-06-12%
Note: Total inflows to mutual funds, SICAVs, GPMs, GPFs, insurance and administered funds(a) Net inflows from Banca Primavera starting from October 2003(b) Banca BSI Italia since July 2006Source: Elaborations based on Assoreti data
1,177 1,015
2,3092,372
1,027 970 7731,360
1,743207
509949242207
120
2000 2001 2002 2003 2004 2005 2006
29,610
15,588 16,244 13,2457,932
14,159 14,164
2000 2001 2002 2003 2004 2005 2006
CAGR 00-0615%
CAGR 00-0615%
Banca Generali
Simgenia
BSI Italia (b)
3% 1% 3% 9% 13% 16% 17%
541
Banca GeneraliMarket Share
Strictly Private and Confidential 15 1515
…and n. 1° Rank in 2005-06
(a) Banca BSI Italia since July 2006Source: Elaborations based on Assoreti data(a) Banca BSI Italia since July 2006Source: Elaborations based on Assoreti data
Net Inflows 2005(€ bn)
Net Inflows 2005(€ bn)
100%=€14.2 bn
16.3%16.3%13.1%13.1%
13.0%13.0%10.9%10.9%
8.3%8.3%7.1%7.1%
5.4%5.4%
2.8%2.8% 2.8%2.8% 2.7%2.7% 2.4%2.4%2.2%2.2% 2.0% 2.0%
8.2%8.2%
1.8%1.8%1.0%1.0%
2,3091,858 1,838
1,5491,175 1,012 771
397 392 382 334 306 286 250
1,160
141
Banca GeneraliXelion Azimut
MediolanumFideuram
FinecobankRasbank BPU Credem
Euromobiliare
BancaLombarda
AXA Banca SaraBdR Credit
Suisse
F&F Others
10.2%10.2%10.7%10.7%11.1%11.1%12.8%12.8%
Banca Generali Simgenia Banca BSI Italia
Net Inflows2006(€ bn)
Net Inflows2006(€ bn)
100%=€14.2bn
16.7%16.7%12.8%12.8%
5.0%5.0%
2.9%2.9% 2.6%2.6% 2.4%2.4%1.9%1.9%
-0.1%-0.1%
8.4%8.4%
(a)
-0.2%-0.2%
1,820 1,805 1,573 1,509 1,444703 442 410 367 339 270 -19 -31
1,206
Bipielle
2,372
Gruppo Banca
Generali
FideuramMediolanum
AzimutXelionFinecobank
Rasbank CreditSuisse
CredemMPS B-Pers
Banca Sara F&F Sella ConsultEuromobiliare
Others
-46-0.3%-0.3%
3.1%3.1%
Strictly Private and Confidential 16 1616
A Long-term Business Model supported by Strong Operative Features
High Potential for New Asset GatheringHigh Potential for New Asset Gathering
Low Exposure to VolatilityLow Exposure to VolatilityLow Exposure to VolatilityLow Exposure to Volatility
Brand New Tools for a More Effective Financial Advice
Brand New Tools for a More Effective Financial Advice
Strictly Private and Confidential 17 1717
Low Exposure to Market Volatility and In-house Performance
9M 2006
€185m€185m
10%
20%
1%
69%
2005
€235m€235m
14%
22%
2%
62%
Gross Commission (€m)
Front FeesPerformance FeesManagement FeesOther Fees
Immaterial impact of performance fees on BG’s P&L
Immaterial impact of performance fees on BG’s P&L
In market downturnsIn market downturns
Life insurance and banking services enhancing stability of assets and net inflowsMigration from more equity-oriented products to capital-protection products, while maintaining similar fee profile
* Not including BG Sicav (10 subfunds without rating)* * Including Fondi Alleanza SGR and Generali Investments Sicav
Wide range of top-quality products to be offered to clients
Wide range of top-quality products to be offered to clients Total of
products
ThirdParties
Generali Group**
In-House*
Products
84628%23615%1243%29
1644%76%16%1
89328%25015%1313%30
3123%719%6--0
Total of productsWeight
N. of funds3 stars
WeightN. of funds4 stars
WeightN. of funds
5 stars
Source: Morningstar, Rating Overall at 31st December 2006
Strictly Private and Confidential 18 1818
A Long-term Business Model supported by Strong Operative Features
High Potential for New Asset GatheringHigh Potential for New Asset Gathering
Low Exposure to VolatilityLow Exposure to Volatility
High Potential for New Asset GatheringHigh Potential for New Asset Gathering
Brand New Tools for a More Effective Financial Advice
Brand New Tools for a More Effective Financial Advice
Strictly Private and Confidential 19 1919
High Potential for New Asset Gathering
Cross selling *300k Clients Clients with C/CAUM
Note: Excluding Simgenia
>1M
250k-1M
100k-250k
<100k
3.05
3.14
2.81
1.4687%
8%4%1%
28%
20%
25%
27% 86%
76%
62%
23%
… to increase existing client’s share of wallet
* Cross selling ratio is based on 5 product’s asset types (Mutual Funds, Wrappers, Insurance Products, Bank Accounts, Securities)
… to acquire new clients and/or enhance actual assets
10.3%
17.5%
24.6%
47.6%Cash & securities
Stock & shareholdings
Life insurance
Mutual funds
72.2
28.7
Non ManagedAssets
Source: Bank of Italy
2005 Italian households’ financial assets
Managed Assets- Objective consulting- Full offer in asset management/life insurance- Performance delivery
- Banking platform- FAs network skilled in banking activity- Competitive products/services- Brand awareness
K.F.S.
Strictly Private and Confidential 20 2020
A Long-term Business Model supported by Strong Operative Features
High Potential for New Asset GatheringHigh Potential for New Asset Gathering
Low Exposure to VolatilityLow Exposure to Volatility
Brand New Tools for a More Effective Financial Advice
Brand New Tools for a More Effective Financial Advice
Brand New Tools for a More Effective Financial Advice
Brand New Tools for a More Effective Financial Advice
Strictly Private and Confidential 21 2121
Brand New Tools for a Real Financial Advice
Client data1 2
# years
TargetCapital
Client profile and investment target
3Strategic planning
Optimisation and what-if models
Client’s Asset Portfolio
Managed by BSI Managed by Third-Parties
To be launched in Feb 07
Monitoring /Re-balancing
5
FinancialAdvice
contract
FinancialAdvice
contract
Portfolioanalysis
Smart Fund
Equity Fund
VIP Fund
Bond Fund
Money MarketFund
Euro Fund
4
PessimisticScenario
OptimisticScenario
Base caseScenario
Strictly Private and Confidential 22 2222
Today’s Agenda
Market Very Favorable Long-term Outlook
Business Model and Operative Platform Fitting with Market TrendsStrategy
Sustainable and Non-volatile Increase of ProfitabilityDelivery Sustainable and Non-volatile Increase of ProfitabilityDelivery
Strictly Private and Confidential 23 2323
Financials Benefiting from Strong Inflows and Leveraging Existing Platform
+24.6%CAGR
+9.5% CAGR
+80.3%CAGR
2003-2005 CAGR
79.5123.2
74.9 97.4 116.2
2003 2004 2005 H1 2006 9M 2006
53.183.873.3 89.4 88.0
2003 2004 2005 H1 2006
34.8
11.910.7
45.330.2
2003 2004 2005 H1 2006
9M 2006
9M 2006
Total Income(€ m)
Operating Expenses
(€ m)
EBITDA(€ m)
Strictly Private and Confidential 24 2424
Actual Cost Structure able to Support AuM DevelopmentActual Cost Structure able to Support AuM Development
Under-levered PlatformUnder-levered Platform
Constant and Non-volatile Operating Margin GrowthConstant and Non-volatile Operating Margin Growth
Strong Top Line GrowthStrong Top Line Growth
Phasing-out of Provisions for FAs RecruitingPhasing-out of Provisions for FAs Recruiting Negligible Capex NeedsNegligible Capex Needs
Pushing Growth into the Bottom Line
SUSTAINABLE NET PROFIT GROWTHSUSTAINABLE NET PROFIT GROWTH
AuM Organic GrowthAuM Organic Growth AuM Mix UpgradeAuM Mix Upgrade Opportunistic RecruitingOpportunistic Recruiting
Strictly Private and Confidential 25 2525
Long term growth and sustainabilityLong term growth and sustainability
Clients’ interestClients’ interest
Creating Value in the Long Run
Shareholders’ returnShareholders’ return FAs’ compensationFAs’ compensation
Strictly Private and Confidential 26 2626
7.5
8
8.5
9
9.5
10
10.5
11
11.5
14 N
ov 06
16 N
ov 06
20 N
ov 06
22 N
ov 06
24 N
ov 06
28 N
ov 06
30 N
ov 06
04 D
ec 06
06 D
ec 06
08 D
ec 06
12 D
ec 06
14 D
ec 06
18 D
ec 06
20 D
ec 06
22 D
ec 06
28 D
ec 06
02 Ja
n 0704
Jan 07
08 Ja
n 0710
Jan 07
12 Ja
n 0716
Jan 07
18 Ja
n 0722
Jan 07
24 Ja
n 0726
Jan 07
Banca Generali Mibtel Index
A Successful IPO
Source: Bloomberg
+37.4%
+4.3%
Share Price Performance
Strictly Private and Confidential 27 2727
What’s Next
• Wednesday March 14, 2007:
10.00 am Board Meeting to approve 2006 results
3.00 pm Analyst Meeting & Conference Call
• Monday May 7, 2007:
2.30 pm Board Meeting to approve Q1 2007 results
5.00 pm Conference Call
• Wednesday March 14, 2007:
10.00 am Board Meeting to approve 2006 results
3.00 pm Analyst Meeting & Conference Call
• Monday May 7, 2007:
2.30 pm Board Meeting to approve Q1 2007 results
5.00 pm Conference Call
Strictly Private and Confidential 28 2828
Contacts
Investor Relations:
Paola Buratti
Tel +39 02 6076 5548Fax +39 02 6682 854
E-mail [email protected]
Institutional Website:
www.bancagenerali.it
Investor Relations:
Paola Buratti
Tel +39 02 6076 5548Fax +39 02 6682 854
E-mail [email protected]
Institutional Website:
www.bancagenerali.it
Strictly Private and Confidential 29 2929
Disclaimer
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the United States of America (“United States”) or distributed, directly or indirectly, in the United States or to any “U.S. Person” as that term is defined in the U.S. Securities Act of 1933 (the “Securities Act”). Neither this document nor any part or copy of it may be taken or transmitted into Australia, Canada or Japan, or distributed directly or indirectly in Canada or distributed or redistributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of U.S., Australian, Canadian or Japanese securities laws. The distribution of this document in other jurisdictions may be restricted by law, and people receiving this document should inform themselves about, and observe each of restrictions.
• The Company's securities have not been and will not be registered under the Securities Act or the securities laws of any state in the United States and may not be offered or sold in the United States except in reliance on an exemption from, or in a transaction not subject to the registration requirements of the Securities Act.
• This document does not constitute or form part of any offer to sell or issue or invite to purchase or subscribe for or any solicitation of any offer to purchase or subscribe for any securities of the Company and should not be constructed as nor shall it or any part of it or the fact of its distribution form the basis of or be relied on in connection with any contract or investment decision.
• No reliance may be placed for any purposes whatsoever on the information contained in this document or any other material discussed or on the completeness accuracy or fairness thereof. Although care has been taken to ensure that the facts stated in this presentation are accurate and that the opinions expressed are fair and reasonable. Accordingly, no representation or warranty, expressed or implied is made or given by or on behalf of the Company or any of its respective affiliates, members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document or any other material discussed. Neither the Company or any of its affiliates, members, directors, officers, employees or consultants, nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.
• The information in this document includes forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments including, among other things, the development of its business trends in its operating industry and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, actual results and developments could differ materially from those expressed or implied by the forward-looking statements. No one undertakes any obligation to update or revise any such forward-looking statements, either in the light of new information, future events or otherwise. Given the above mentioned risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise.
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