Banca Mediolanum SpA · MIL:BMED
Banca Mediolanum SpA — Mediolanum — FY2013 Earnings Presentation
50 slides from Banca Mediolanum SpA's earnings presentation, Mar 26, 2014
Slide 1: Mediolanum FY 2013 Results
1 March 26, 2014 MEDIOLANUM FY 2013 RESULTS 2 Table of Contents FY 2013 Group p Results 3 FY 2013 Domestic Market Results 15 FY 2013 Foreign g Markets Results 36 FY 2013 Group p Embedded Value 41 Business Update p 53 Mediolanum Facts 75
Slide 2: Income Statement - Group
3 FY 2013 Group Results FY 2013 4 Group Income Statement - Group € mn FY13 FY12 Change Net premiums written 4,873.8 8,053.7 -39% Amounts paid & change in technical reserves (4,815.3) (8,009.4) -40% Insurance revenues ex U-L commissions 58.5 44.2 +32% Entry fees 136.9 115.6 +18% Management fees 563.9
Slide 3: Income Statement Salient Points; Income Statement by Quarter
FY 2013 5 Group Income Statement Salient Points YoY comparison Entry fees (€ 21 mn higher YoY) reflect the unprecedented levels of inflows into mutual funds Management fees (€ 102 mn higher YoY) grew in line with average managed assets Net Interest Income (€ 39 mn lower YoY) reflects the lower inter
Slide 4: Quarterly Commission Income from Management Fees; Net Interest Income
FY 2013 7 Group Quarterly Commission Income from Management Fees € mn Management fees (€ mn) yearly bps on average assets 200 200 202 194 198 200 140 120 150 100 80 100 151 139 144 123 129 60 110 111 117 102 103 101 102 89 92 98 50 79 84 40 70 58 65 20 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 5: Quarterly Recurring Revenues; Assets under Administration
FY 2013 9 Group Quarterly Recurring Revenues Commission Income from Management Fees + Net Interest Income (€ mn) 218 216 194 186 197 200 201 203 175 156 161 138 147 121 119 126 104 110 111 110 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 FY 2013 10 Group Asset
Slide 6: AUA Trend; Embedded Value
FY 2013 11 Group AUA Trend € bn 57.8 51.6 Administered Assets (FY13: € 19.0 bn) 45.9 46.2 Managed Assets (FY13: € 38.8 bn) 40.4 34.6 33.3 30.4 29.5 26.0 23.5 20.9 21.0 17.9 13.0 9.5 7.2 5.5 5.9 4.7 5.3 2.0 2.6 3.1 1.3 1.6 0.1 0.6 0.9 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Slide 7: Dividend Proposal; Dividend Payout
FY 2013 13 Group Dividend Proposal Dividend per share 25 eurocents - interim dividend paid in November 2013 10 eurocents - balance to be paid in May 2014 15 eurocents Total amount of dividends € 184 mn Dividend payout ratio (on consolidated net income) 55% FY 2013 14 Group Dividend Payout 120% € mn
Slide 8: FY 2013 Domestic Market Results; Income Statement - Domestic
15 FY 2013 Domestic Market Results FY 2013 16 Domestic Market Income Statement - Domestic € mn FY13 FY12 Change Net premiums written 4,673.1 7,925.2 -41% Amounts paid & change in technical reserves (4,639.1) (7,899.1) -41% Insurance revenues ex U-L commissions 34.0 26.1 +30% Entry fees 128.6 110.4 +
Slide 9: Income Statement by Quarter; Acquisition Costs in Detail
FY 2013 17 Domestic Market Income Statement by Quarter € mn Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Insurance revenues ex U-L commissions10.3 5.0 6.9 3.9 7.6 10.6 11.5 4.3 Entry fees 25.0 26.4 23.7 35.3 32.7 39.8 26.0 30.1 Management fees 105.9 106.7 112.7 118.4 124.0 133.5 138.4 144.9 Performance f
Slide 10: Total Net Inflows; Profit by Segment
FY 2013 19 Domestic Market Total Net Inflows € mn FY13 FY12 Change Life premiums (1,513.9) (991.2) +53% Asset management products 4,582.8 2,343.3 +96% Managed Assets Inflows 3,068.9 1,352.2 +127% 3rd-party Structured Bonds (67.0) 200.7 n.s. Managed Assets incl. Structured Bonds 3,001.9 1,552.9 +93%
Slide 11: Asset Management Segment Gross and Net Inflows
FY 2013 21 Domestic Asset Management Segment Market Gross Inflows € mn - U-L assets not included FY13 FY12 Change 'Best Brands' funds of funds (IRL) 5,880.3 3,659.0 +61% 'Challenge' mutual funds (IRL) 670.6 1,018.9 -34% 'Fondi Italia' mutual funds (ITA) 1,525.6 1,067.9 +43% 'Real estate' fund (ITA)
Slide 12: Asset Management Net Inflows by Category
FY 2013 23 Domestic Asset Management Segment Market Net Inflows by Category* € mn FY13 € +4,583 mn -13 +10 +979 FY12 +1,368 € +2,343 mn +55 -41 -41 -5 +2,375 +2,240 Bond Equity Balanced Money Other Bond Equity Balanced Money Other mkt mkt * Flexible funds are classified according to their equivalent
Slide 13: Asset Management Assets under Management; AUM Trend
FY 2013 25 Domestic Asset Management Segment Market Assets under Management € mn - including U-L assets 31/12/13 31/12/12 Change 'Best Brands' funds of funds (IRL) 11,494.7 7,676.9 +50% 'Portfolio' funds of funds (IRL) 532.2 578.5 -8% 'Challenge' mutual funds (IRL) 12,541.3 11,980.7 +5% Funds of Hed
Slide 14: Insurance Segment Revenues
FY 2013 27 Domestic Insurance Segment Market Revenues € mn FY13 FY12 Change Premiums less Amounts paid & change in reserves 34.0 26.1 +30% Commission income 297.1 269.4 +10% Net Interest Income 16.3 17.1 -5% Net income on investments at fair value 6.2 81.5 -92% o/w unrealised 4.0 26.2 -85% Net finan
Slide 15: Insurance Segment Life - Amounts Paid in Detail
FY 2013 29 Domestic Insurance Segment Market Life - Amounts Paid in detail € mn - ex 'Freedom' Life Policies FY13 FY12 Change Claims 58.1 64.8 -10% Coupons 54.6 64.5 -15% Maturities 1,333.3 1,095.8 +22% o/w index-linked 960.8 773.4 +24% Surrenders 1,169.7 997.6 +17% LIFE AMOUNTS PAID 2,615.7 2,222.8
Slide 16: Life Policyholders' Assets; Banking Segment Revenues
FY 2013 31 Domestic Insurance Segment Market Life - Policyholders' Assets € mn 31/12/13 31/12/12 Change Traditional 1,315.5 1,372.0 -4% Index-linked 1,474.8 2,572.7 -43% Unit-linked pension plans 4,421.8 3,728.2 +19% Unit-linked endowment policies 3,772.4 3,620.7 +4% Unit-linked investment policies
Slide 17: Banking Segment Mortgage Update; Assets under Administration
FY 2013 33 Domestic Banking Segment Market Mortgage Update € mn FY 2013 FY 2012 Stock Mortgage portfolio 3,495.8 2,991.8 Avg. spread 1,70% 1.58% Avg. duration in yrs 20 20 Avg. initial LTV 64% 63% New business Total amount granted 702.5 753.6 Avg. spread 2.86% 2.26% Avg. amount granted 141 150 Avg.
Slide 18: Banca Esperia Highlights; Foreign Markets Results
FY 2013 35 Domestic Banca Esperia (100%) Market Highlights € mn FY13 FY12 Change Net Income 1.5 5.1 -70% o/w Mediolanum share 0.8 2.5 -70% Assets under Administration 15,300 13,800 +11% % in Managed Assets 49.2% 55.7% -12% Net Inflows (142) (1,241) -89% o/w Managed Assets Inflows (325) (770) -58% Pr
Slide 19: Spain Highlights; Germany - B. A. Lenz
FY 2013 37 Foreign Spain Markets Highlights € mn FY13 FY12 Change Net Income 26.3 7.2 +265% Managed Assets 1,462.2 1,181.2 +24% Administered Assets 914.1 618.4 +48% Total Assets 2,376.3 1,799.6 +32% Gross Inflows into Managed Assets 537.9 285.2 +89% Net Inflows into Managed Assets 237.7 88.2 +170% N
Slide 20: Germany - Gamax; Germany - Total
FY 2013 39 Foreign Germany - Gamax Markets Highlights € mn FY13 FY12 Change Net Income 2.6 1.7 +47% Assets under Administration 214.0 228.4 -6% Gross Inflows 105.4 53.7 +96% Net Inflows (41.9) (0.1) n.s. FY 2013 40 Foreign Germany - Total Markets Highlights € mn FY13 FY12 Change Net Income before im
Slide 21: FY 2013 Group Embedded Value; MCEV-compliant Methodology
41 FY 2013 Group Embedded Value FY 2013 42 Group EV MCEV-compliant Methodology Further details available in the supplementary disclosure on the Mediolanum website Compliant with CFO Forum MCEV Principles MCEV fully adopted for covered business (Life Insurance) Asset Management and Banking Consistent
Slide 22: Group Embedded Value; Embedded Value Earnings
FY 2013 43 Group EV Group Embedded Value € mn FY13 FY12R FY12 Change Published shareholders' net assets 1,651 1,420 1,420 +16% Adjustments to net assets (90) (103) (103) -13% Adjusted shareholders' net assets 1,561 1,317 1,317 +19% Italy - VIF Life Business (MCEV) 1,262 1,294 1,294 -2% Italy - VIF A
Slide 23: EV Earnings Components (1); Operating Experience Variances
FY 2013 45 Group EV EV Earnings Components (1) Earnings on Initial EV € mn FY13 FY12 Expected return on EV - unwind 112 194 Operating assumption changes (168) (42) Economic assumption changes & experience variances 338 399 Operating experience variances* 33 30 Earnings on Initial EV 315 581 Value ad
Slide 24: EV Earnings Components (2); Life New Business Margins
FY 2013 47 Group EV EV Earnings Components (2) Value Added by New Business € mn FY13 FY12 Earnings on Initial EV 315 581 Life New Business 31 10 A.M. New Business 288 194 Banking New Business 26 47 Value added by New Business 345 250 EV Earnings 660 831 FY 2013 48 Group EV Life New Business Margins
Slide 25: A.M. New Business Margins (%PVNBP); Life Margins (%APE)
FY 2013 49 Group EV A.M. New Business Margins(% %PVNBP*) Domestic Market € mn FY13 FY12 Change A.M. New Business Margin 4.2% 4.0% +4% Value of New Business - 'moment of sale' 280 189 +48% PVNBP 6,681 4,687 +43% * Present Value of New Business Premiums FY 2013 50 Group EV Life New Business Margins (%
Slide 26: A.M. New Business Margins (%APE); Spain In-force Value
FY 2013 51 Group EV A.M. New Business Margins (%APE*) Domestic Market € mn FY13 FY12 Change A.M. New Business Margin 41.1% 39.1% +5% Value of New Business - 'moment of sale' 280 189 +48% Installment plans 53 61 -13% Lump sum investments 6,286 4,219 +49% APE 681 483 +41% * Annual Premium Equivalent F
Slide 27: Business Update: Market Leader in 2013 Net Inflows
53 Business Update Business 54 Update Mediolanum: the Market Leader in 2013 Net Inflows Italian Networks by group - € thousands FY 2013 Total Net Inflows o/w Managed Assets o/w Mutual Funds * * Banca Mediolanum 3,397,417 3,126,980 4,585,255 Azimut 2,777,687 2,737,974 914,456 Unicredit (Finecobank) 2
Slide 28: Net Inflows into Mutual Funds; February 2014 Net Inflows
Business 55 Update Net Inflows into Mutual Funds* € mn 12000 600 +524 8000 400 4000 200 0 0 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jul 00 Jul 01 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 -4000
Slide 29: Ranking of Italian A.M. Groups by Mutual Funds Assets
Business 57 Update Ranking of Italian A.M. Groups by Mutual Funds Assets Source: Assogestioni (M&A operations) December 2007 December 2008 December 2009 December 2010 December 2011 December 2012 February 2014 1. Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo Intesa Sanpaolo Intesa S
Slide 30: 'MyLife' Whole-life Unit-linked Policy
Business 59 Update ‘MyLife’ Whole-life Unit-linked Policy launched March 2014 State-of-the-art insurance wrapper for mutual funds addresses all needs of HNW investors Financial planning: flexible, hassle-free diversification across all investment classes, with access to 100+ funds: all Mediolanum fu
Slide 31: 'Riparti Italia' Home Remodeling Mortgages
Business 61 Update ‘Riparti Italia’ Home Remodeling Mortgages launched September 2013 Helping Italy’s recovery by stimulating demand in the construction industry Government reimburses 50% of spending for home remodeling (65% when improving energy efficiency), in the form of tax deductions over 10 ye
Slide 32: 'InMediolanum' Results; 'Freedom+' Current Account
Business 63 Update ‘InMediolanum’ Results from 07/05/2011 to 28/02/2014 – also includes other locked-in products New customers 49,067 o/w direct access 28% o/w through Family Banker 72% Total assets from new customers (€ mn) 1,407 Existing customers 102,587 Total assets from existing customers (€ mn
Slide 33: 'Freedom' & 'Freedom+' Accounts Results
Business 65 Update ‘Freedom’ & ‘Freedom+’ Accounts Results as at 28/02/2014 – locked-in amounts not included Total Accounts 194,148 Total assets in ‘Freedom’ & ‘Freedom+’ € 5.04 bn Asset split: - non-interest-bearing current account (< € 15,000) € 1.54 bn - high-yield Life policy (‘Freedom’) € 1.65
Slide 34: Bank Accounts & Bank Customers; Family Banker Network
Business 67 Update Banca Mediolanum Bank Accounts & Bank Customers as at 28/02/2014 Bank Accounts Customers (including deposit accounts) (883,123 primary account holders) 711,270 737,000 667,223 with a bank account… 28/02/2013 28/02/2014 +4% YoY ...56% of which use Mediolanum as their primary bankin
Slide 35: Family Bankers Headcount; Group Bond Portfolio
Business 69 Update Banca Mediolanum Network of Family Bankers Change in headcount, Jan 1 – Feb 28 2014 -36 +57 -6 4,407 4,422 Jan 1 Resigned Retired Recruited Feb 28 Turnover rate: 5.7% (annualised) Business 70 Update Mediolanum Group Bond Portfolio € mn – as at 31/12/2013 Financial Conglomerate = B
Slide 36: Banca Mediolanum Balance Sheet; Interest Spread
Business 71 Update Banca Mediolanum Balance Sheet € mn – as at 31/12/2013 Liabilities Assets Retail 10,150 4,605 Treasury 7,754 13,689 o/w / interbank i t b k / iintra-group t deposits d it & repos 1,669 1 669 1,152 1 152 o/w ECB (LTRO & other refinancing) 3,000 3,090 o/w MTS (collateral-backed fina
Slide 37: Group Capital Adequacy; Banking Group Capital Ratios
Business 73 Update Mediolanum Group Capital Adequacy € mn Excess capital calculation criteria have changed after regulators’ recognition of Banking as prevailing business 31/12/2013 31/12/2012 Banking Insurance prevalence prevalence Total Regulatory Capital Held 1,075 1,252 Total Required Capital 61
Slide 38: Mediolanum Facts: Group Structure
75 Mediolanum Facts Mediolanum 76 Facts Mediolanum Group Structure as at 31/12/2013 40.4% 30.1% Doris Group Fininvest Mediolanum 3.38% (directly & through Mediobanca Mediolanum Vita) 100% Banca Mediolanum Banking Group 50% Mediolanum* Mediolanum 51% Gestione Fondi 49% Mediolanum Banca 100% Vita Espe
Slide 39: The Mediolanum Integrated Business Model
Mediolanum 77 Facts The Mediolanum Integrated Business Model We integrate the asset gathering business of Life insurance & mutual funds with the banking business… ,QVX XUDQFH 0XWXDO )XQGV %DQN …on the strength of an avant-garde model Mediolanum 78 Facts The Mediolanum Integrated & Comprehensive Reta
Slide 40: Mediolanum vs. Current Bank Models; Net Inflows Trend
Mediolanum 79 Facts Mediolanum vs. Current Bank Models Traditional bank On-line bank The human relationship Freedom of use high prices << Customer >> low prices high costs but high revenues << Bank >> low costs but low revenues The Mediolanum model unifies the advantages of the on-line with the trad
Slide 41: Italian Households' Financial Assets; Net Profit
Mediolanum 81 Facts Italian Households’ Financial Assets Mediolanum’s Market Share 1,4% 1.33%* 1,2% 1,0% 0,8% 0,6% 0,4% 0,2% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * based on a total of € 3.7 trillion calculated by Banca d’Italia Mediolanum 82 Facts Net Profit € mn 351
Slide 42: Performance Fees; Family Banker Network
Mediolanum 83 Facts Yearly Commission Income from Performance Fees Including Managed Accounts & Unit-linked policies Performance fees (€ mn) bps on average assets* 160 146 200 140 133 97 160 120 99 100 10-yr average 88 120 80,2 bps 80 76 57 63 52 172 182 60 153 155 152 80 45 45 40 92 85 83 40 57 62
Slide 43: Banca Mediolanum Customers; Bank Accounts
Mediolanum 85 Facts Banca Mediolanum Customers Primary account holders (thousands) 915 921 897 894 886 879 878 840 798 761 778 785 715 619 465 495 386 410 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Mediolanum 86 Facts Banca Mediolanum Bank accounts Thousands March 2005 ‘4Freedoms’ strateg
Slide 44: Total Net Inflows by Group; Mediolanum's Culture
Mediolanum 87 Facts Total Net Inflows by Group: Mediolanum in the top of the ranking Italian Networks - € thousands 2009 - 2013 Total Net Inflows o/w Managed Assets o/w Mutual Funds Mediolanum 17.303 8.623 11.888 Fideuram (incl. Sanpaolo Invest) 11.179 15.374 10.486 Unicredit (Fineco) 9.388 6.467 8.
Slide 45: Investment Advisory Strategy; Open Architecture
Mediolanum 89 Facts Investment Advisory Strategy Our investment strategy explains the consistency of our inflows & transfers ‘technical performance’ into ‘customer performance’ We advise our customers proposing products & services that correspond to each of their specific needs Investor needs remain
Slide 46: 'OgniMese Mediolanum'; Corporate University
Mediolanum 91 Facts ‘OgniMese Mediolanum’ launched November 2012 A timely new service for investors who want a monthly income stream Money is invested in a bouquet of at least 4 funds, with different strategies and belonging to different categories to ensure real diversification Coupon dates are arr
Slide 47: Corporate TV Channel; Marketing Events
Mediolanum 93 Facts Training & Communication: Corporate TV Channel A proprietary state-of-the-art tool established in 1989 Encrypted programs to train, motivate & communicate with our Family Bankers - Company news - Product information - Online training course support - Inspirational thoughts for pe
Slide 48: Fourth Best Known Bank Brand in Italy; Advertising
Mediolanum 95 Facts Mediolanum is now the 4th best known Bank Brand in Italy Total Brand awareness – Italian banks (%) 2013 2011 2012 2013 Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dic UNICREDIT 47 47 43 40 46 40 41 43 44 45 39 42 46 46 INTESA SANPAOLO 42 44 41 39 39 37 44 40 42 37 40 39 45 46 MPS 23
Slide 49: Italian Banks by Market Capitalisation; Total Return Index
Mediolanum 97 Facts Ranking of Italian Banking Groups by Market Capitalisation March 2014 Unicredit € 37.6 bn Intesa-SanPaolo € 37.2 bn Mediobanca € 6.8 bn UBI € 5.8 bn Mediolanum € 4.8 bn Banco Popolare € 3.0 bn BPER € 2.8 bn MPS € 2.8 bn Banca Generali € 2.7 bn CREDEM € 2.3 bn BPM € 2.2 bn Pop. di
Slide 50: Disclaimer; Investor Relations Contacts
99 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