Generali Group 2014 First Half Results

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  • Generali July 31, 2014 2014 First Half Results GENERALI GROUP 2014 First Half Results Please note that prior years figures have been restated throughout the whole presentation to reflect the new perimeter of the Group. Net income, Shareholders Equity, Solvency I, Life Value KPIs, Embedded Value, Economic Solvency are not adjusted for disposed entities. The like for like change of written premiums, life net inflows, APE and NBV is on equivalent terms (on equivalent exchange rates and consolidation area).
  • Generali July 31, 2014 2014 First Half Results Agenda 2 - Business Update Page 3 Mario Greco Group CEO - 2014 First Half Group Financials Page 10 Alberto Minali Group CFO - Backup Page 33
  • Generali July 31, 2014 2014 First Half Results Agenda 3 I. Business Update Mario Greco Group CEO
  • Generali July 31, 2014 2014 First Half Results 4 All of the targets set out in the 2015 turnaround plan are either concluded or within sight: aiming to achieve remaining targets as soon as practicable Our business now has solid foundations and is well positioned for growth: TechEx and OpEx initiatives bearing fruit with new products and markets delivering profitable growth For the first time in many years we have a new normal for Generali: capital target reached, transparency and cohesion across our businesses and enhanced profitability The power of Discipline, Simplicity and Focus Turning the page to a new normal for Generali CEO Business overview
  • Generali July 31, 2014 2014 First Half Results 5 The power of Discipline, Simplicity and Focus A focus on profitability and cost savings CEO Business overview Solid and continuous improvement in operating profit Great strides towards cost savings goals Solid net result despite detrimental one-off items 2.5 bn 2.3 bn 1H14 1H13 1H12 1H11 2.2 bn 2.2 bn +9.5% Group operating profit Life segment 1.6 bn 1.5 bn 1.6 bn 1.6 bn 1H14 1H13 1H12 1H11 New Business Margin +6.2 %pts. P&C segment 1.0 bn 0.9 bn 0.7 bn 0.8 bn 1H14 1H13 1H12 1H11 Combined Ratio -1.8 %pts. 1H14/1H13 1H14/1H13 P&C Expense Ratio Life Expense Ratio Well on track to achieve 520 m cost savings cumulatively (2013/14) +4.8% +14.8% 806 842 1,081 1,075 ( m) Net Result Net income excluding discontinued operations, +12.5% 1H11 1H12 1H13 1H14 27.6 27.6 27.5 27.1 1H11 1H12 1H13 1H14 11.0 10.9 10.6 9.6 1H11 1H12 1H13 1H14
  • Generali July 31, 2014 2014 First Half Results Operation Closing Date Proceeds ( bn) Exit multiple (historic) Solvency 1 impact Migdal 4Q12 0.7 17x +2%pts. Banca Generali (12% placement) 2Q13 0.2 12x +1%pts. Generali USA Life Re 4Q13 0.7 15x +1%pts. Mexico 4Q13 0.6 18x +4%pts. Fata 2Q 14 0.2 15.5x +1%pts. BSI(1) By 1H15 1.2 n/m +9%pts Cumulative Total 3.7 +18%pts. Completion of asset disposals a year ahead of schedule Non-core asset disposal programme generated 18%pts of Solvency I capital CEO Business overview Disposal programme brings multiple benefits Completion of disposal programme has significantly contributed to higher solvency and debt reduction Together with the acquisition of minority holdings the group is simpler and more focus on the business of insurance With completion of BSI, Generali will have minimal exposure to non-insurance activities (1) Subject to final adjustment
  • Generali July 31, 2014 2014 First Half Results Completion of disposal programme, retained earnings, and improved financial market conditions result in target being met one year early Solvency I impact of the acquisition of GPH minorities (-7%pts) and the announced sale of BSI (+9%pts)(1) expected in 3Q 2014 / 1H 2015 respectively 7 Balance sheet strength restored Solvency I ratio at target, and at highest level for a decade CEO Business overview 136% 118% 143% 123% 128% 132% 117% 145% 141% 152% 162% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 1Q14 1H14 Target 160% Solvency I Ratio(%) (1) Subject to final adjustment
  • Generali July 31, 2014 2014 First Half Results 8 The power of discipline, simplicty and focus Continued focus on delivering operational excellence and reducing costs and debt CEO Business overview Rapid delivery to complete remaining targets Refinancing completed to 2016 with 60m lower interest costs and overall debt reduction of 1bn On track with delivery of additional 1bn in cost savings Generali Deutschland squeeze out and Fata disposal completed and Telco demerged approved Issuance of first Cat Bond by the group for European wind peril S&P rating affirmed at A-, after the group demonstrated its ability to withstand S&Ps extreme sovereign stress scenario Citylife restructuring completed after deal reached with financing banks and Allianz With our November investor day giving an insight into the potential of our group as we move to complete our 2015 vision A detailed look under the bonnet of our core markets from: CEE, Luciano Cirin Generali Italy, Philippe Donnet Generali France, Eric Lombard Generali Deutschland, Dietmar Meister And how each will help to deliver top quartile returns for our shareholders
  • Generali July 31, 2014 2014 First Half Results Our vision for Generali in 2015 Generali July 31, 2014 2014 First Half Results Superior customer acquisition and retention; focus on retail and affluent space Consistent technical excellence and tight control of costs Focused on core insurance business, with greater contribution from P&C Stronger capital position and disciplined balance sheet management The mission is to deliver top quartile shareholder returns and profitability
  • Generali July 31, 2014 2014 First Half Results Agenda 2014 First Half Group Financials 10 Alberto Minali Group CFO - Profit & Loss and Balance Sheet Page 11 - Business review Page 19
  • Generali July 31, 2014 2014 First Half Results Agenda 11 - Profit & Loss and Balance Sheet Page 11 - Business review Page 19 Alberto Minali Group CFO 2014 First Half Group Financials
  • Generali July 31, 2014 2014 First Half Results Operating Result: Good development thanks to all business segments Life: Increasing thanks to lower expenses and improved investment result. Strong increase in new business and net inflows, especially unit linked P&C: Positive performance thanks to significantly higher technical result Net Result: Stable reflecting one-off effects from discontinued operations Solvency I: Significant improvement of Solvency capital position thanks to successful placement of subordinated bond and financial market development 1H13 1H14 LFL D 2Q13 2Q14 LFL D Operating result ( m) 2,295 2,512 9.5% 1,040 1,253 +20.4% Operating RoE 6.9% 7.3% +0.4%pts. 3.1% 3.6% +0.5%pts. Net result ( m) 1,081 1,075 -0.5% 478 415 -13.0% EPS () 0.70 0.69 -1.5% 0.31 0.27 -13.9% Net operating EPS () 0.76 0.84 +10.4% 0.34 0.43 +24.8% Shareholders equity(1) 19,778 22,125 +11.9% Solvency I(1) 141% 162% +21%pts 12 Key First Half 2014 financials at a glance CFO Profit & Loss (1) Comparative data FY13 (2) Subject to final adjustment
  • Generali July 31, 2014 2014 First Half Results 2,295 71 133 31 14 2,512 (32) 1H13 LIFE P&C FINANCIAL SERVICES HOLDING EXP. CONS.AD 1H14 13 Operating result by segment CFO Profit & Loss 1H14 1,551 1,033 226 (197) (101) 1H13 1,481 900 195 (165) (116) D +4.8% +14.8% +15.8% +19.3% -12.3% ( m) +9.5%
  • Generali July 31, 2014 2014 First Half Results 14 From operating result to net profit CFO Profit & Loss 1H14 2,512 (74) (409) (170) (636) (24) (124) 1,075 1H13 2,295 (23) (395) (185) (603) 128 (135) 1,081 D +9.5% n.m. +3.4% -8.3% +5.4% n.m. -7.7% -0.5% 2,512 (74) (409) (170) (636) (24) (124) 1,075 OPERATING RESULT NON OPER. INVESTMENT INCOME NON OPER. HOLDING EXPENSES NET OTHER NON OPER. EXPENSES INCOME TAXES DISC. OPERATIONS MINORITIES NET RESULT ( m) Including: - 383 m: Interest costs Including: - 70 m: VOBA amortization Including: - 113 m: impact from BSI disposal Net income excluding discontinued operations, +12.5% Including: - 190 m: Ingosstrakh impairment
  • Generali July 31, 2014 2014 First Half Results 19,778 2,420 1,075 22,125 (701) (447) SHAREHOLDERS' EQUITY FY13 AFS RESERVE 1H 2014 NET RESULTS DIVIDEND OTHER SHAREHOLDERS EQUITY 1H14 15 Shareholders equity CFO Balance Sheet Change in AFS reserve ( m) Shareholders equity sensitivities ( bn) -1.2 2.8 -2.9 -1.8 Credit spread + 100 bps Interest rate -100 bps Interest rate +100 bps Equities -30% +11.9% Shareholders equity rollforward ( m) 2,501 2,338 158 4,921 (77) AFS RESERVE FY13 IMPACT EQUITY INVESTMENT IMPACT BOND INVESTMENTS OTHER AFS RESERVE 1H14
  • Generali July 31, 2014 2014 First Half Results 16 Solvency I CFO Capital +21%pts 157 154 177 144 151 162 Real estate -10% Credit spread + 100bps Interest rate - 100bps Interest rate +100bps Equities -30% Total ratio 30.06.2014 Solvency I ratio sensitivities (%) Solvency I rollforward (%) 141% 7%pts. 5%pts 12%pts 162% (2%pts.) (1%pts.) SOLVENCY I FY13 REQUIRED MARGIN GROWTH M&A (1) CONSOLIDATED RESULT SUBORDINATED DEBT FIN