Banca Mediolanum SpA · MIL:BMED
Banca Mediolanum SpA — Mediolanum — FY2014 Earnings Presentation
40 slides from Banca Mediolanum SpA's earnings presentation, Feb 11, 2015
Slide 1: FY 2014 Results
February 11, 2015 FY 2014 RESULTS Mediolanum 2 Table of Contents FY 2014 Results and colour key FY 2014 Group Results 3 FY 2014 Domestic Market Results 16 FY 2014 Foreign Markets Results 39 Business Update 44 Mediolanum Facts 52
Slide 2: FY 2014 Group Income Statement
3 FY 2014 Group Results FY 2014 4 Income Statement Group € mn FY14 FY13 Change Entry fees 96.9 136.9 -29% Management fees 674.2 563.9 +20% Performance fees 176.1 181.6 -3% Banking service fees 100.5 91.4 +10% Other fees 34.1 32.6 +4% Total commission income 1,081.8 1,006.5 +7% Net interest income 23
Slide 3: Income Statement Salient Points and Dividend Proposal
FY 2014 5 Income Statement Salient Points Group YoY comparison Entry fees (€ 40 mn lower YoY) reflect a different mix in favour of products with low or no entry fees Management fees (€ 110 mn higher YoY) our #1 revenue source grew in line with avg. managed assets, benefitting from record net inflows
Slide 4: Dividend Payout and Capital Adequacy
FY 2014 7 Dividend Payout Group € mn 351 Net Income 337 321 Retained Earnings Total dividends paid 153 122 233 224 224 219 212 217 88 78 66 107 110 141 131 129 115 39 21 103 88 82 50 67 199 75 46 30 184 54 60 38 9 146 146 146 132 26 34 102 110 110 114 27 69 73 73 80 81 27 34 41 50 -14 96 97 98 99 00
Slide 5: Income Statement by Quarter
FY 2014 9 Income Statement by Quarter Group € mn Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Entry fees 34.5 42.1 28.0 32.3 24.1 26.7 23.2 22.9 Management fees 129.2 139.1 144.4 151.1 155.6 163.9 175.1 179.5 Performance fees 59.3 25.0 44.9 52.4 31.3 55.3 33.3 56.2 Banking service fees 24.6 22.9 20.7 23.
Slide 6: Performance Fees and Quarterly Net Interest Income
FY 2014 11 Commission Income from Performance Fees Group including Unit-Linked policies Performance fees in € mn bps on average assets* 146 133 172 182 176 99 97 10-yr average 88 153 80.5 bps 155 152 76 57 63 60 52 85 83 45 45 57 62 92 50 03 04 05 06 07 08 09 10 11 12 13 14 * Calculated only on thos
Slide 7: Quarterly Recurring Revenues and AUA Trend
FY 2014 13 Quarterly Recurring Revenues Group Commission Income from Management Fees + Net Interest Income (€ mn) 300 250 200 150 234 239 218 216 214 221 100 177 194 186 197 199 201 203 159 164 128 141 149 122 121 50 106 111 112 111 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 8: Assets under Administration
FY 2014 15 Assets under Administration Group € mn 31/12/14 31/12/13 Change Mutual Funds & U-L Policies 35,332.8 29,157.7 +21% ’Freedom’ Life Policies 974.3 1,722.3 -43% Other Life Insurance products 2,147.0 2,790.3 -23% Banking* 14,578.9 13,690.1 +6% Italy – Banca Mediolanum 53,033.0 47,360.3 +12% I
Slide 9: Domestic Market Income Statement
FY 2014 17 Income Statement Domestic Market € mn FY14 FY13 Change Entry fees 87.7 128.6 -32% Management fees 641.3 540.8 +19% Performance fees 167.0 174.2 -4% Banking service fees 82.0 76.0 +8% Other fees 32.8 31.0 +6% Total commission income 1,010.8 950.7 +6% Net interest income 210.3 250.8 -16% Ne
Slide 10: Acquisition Costs in Detail and Total Net Inflows
FY 2014 19 Acquisition Costs in detail Domestic Market € mn FY14 FY13 Change One-time commissions 131.3 152.2 -14% Ongoing commissions 183.3 149.5 +23% Total commissions 314.6 301.7 +4% Incentives on individual net inflows 36.4 31.0 +18% Contests & bonuses 20.1 20.2 -0% Reimbursement of costs for cu
Slide 11: Mutual Funds Net Inflows
FY 2014 21 Mutual Funds Domestic Market Net Inflows by Category € bn – including Unit-Linked policies FY13 FY14 € +4,377.7 mn € +4,827.6 mn +1,087 +982 +10 -15 -6 -26 +875 +1,034 +1,630 +2,295 +1,256 +83 Valore Bond Equity Balanced Money Other Valore Bond Equity Balanced Money Other Attivo mkt Attiv
Slide 12: Mutual Funds Gross Inflows and Assets by Category
FY 2014 23 Mutual Funds Domestic Market Gross Inflows by Product € mn FY14 FY13 Change ’Best Brands’ funds of funds (IRL) 4,006.9 5,880.3 -32% ’Challenge’ mutual funds (IRL) 582.9 670.6 -13% ’Fondi Italia’ mutual funds (ITA) 3,132.0 1,525.6 +105% Other & 3rd-party funds 186.6 33.5 +458% DIRECT GROSS
Slide 13: Mutual Funds Assets under Management and AUM Trend
FY 2014 25 Mutual Funds Domestic Market Assets under Management € mn 31/12/14 31/12/13 Change ’Best Brands’ funds of funds (IRL) 13,819.0 11,494.7 +20% ’Portfolio’ funds of funds (IRL) 459.8 532.2 -14% ’Challenge’ mutual funds (IRL) 13,386.6 12,541.3 +7% Funds of Hedge Funds (IRL) 166.2 178.1 -7% ’F
Slide 14: Banking Revenues and Interest Spread
FY 2014 27 Banking Domestic Market Revenues € mn FY14 FY13 Change Securities trading fees 35.5 31.2 +14% o/w 3rd-party structured bonds 25.5 21.6 +18% Service fees 46.5 44.8 +4% Fee income 82.0 76.0 +8% Net Interest Income 203.6 247.0 -18% Net income on investments at fair value (16.0) 12.6 n.s. o/w
Slide 15: Banking Credit Quality and Mortgage Update
FY 2014 29 Banking Domestic Market Credit Quality € mn – as at 31/12/2014 31/12/14 31/12/13 Change Mortgages 4,161 3,496 +19% Personal & Commercial Loans 861 697 +24% Lines of credit 416 413 +1% Total Loans 5,438 4,605 +18% % on total loans B.Mediolanum Italian Banks* Gross non-performing loans 1.4%
Slide 16: Banking Assets under Administration and Balance Sheet
FY 2014 31 Banking Domestic Market Assets under Administration € mn 31/12/14 31/12/13 Change Cash Deposits 11,379.8 9,929.8 +15% Repurchase agreements 0.4 32.9 -99% Mediolanum bonds 272.1 355.6 -23% 3rd-party structured bonds 1,044.2 1,282.8 -19% Other securities under custody 1,882.4 2,088.9 -10% B
Slide 17: Group Bond Portfolio and Insurance Revenues
FY 2014 33 Mediolanum Group Domestic Market Bond Portfolio € mn – as at 31/12/2014 Mediolanum Group = Banca Mediolanum + Mediolanum Vita Book value AD Book Value AD Book Value AD Italian Govies 18,083 1.1 16,409 0.9 1,543 2.7 Italian Financials 455 3.3 188 2.1 267 4.1 Spanish Govies 559 0.7 526 0.6
Slide 18: Insurance Policyholders' Assets and Family Banker Network
FY 2014 35 Insurance Domestic Market Life – Policyholders’ Assets € mn 31/12/14 31/12/13 Change Traditional 1,265.2 1,315.5 -4% Index-linked 881.8 1,474.8 -40% Unit-linked pension plans 5,025.7 4,421.8 +14% Unit-linked endowment policies 3,896.3 3,772.4 +3% Unit-linked investment policies 3,992.2 2,
Slide 19: Private Bankers and Banca Esperia Highlights
FY 2014 37 Banca Mediolanum Domestic Market Focus on ‘Private Bankers’* as at 31/12/2014 409 362 322 215 248 146 177 124 83 2006 2007 2008 2009 2010 2011 2012 2013 2014 Average assets in portfolio: € 29.4 mn o/w managed assets: € 21.1 mn * 'Private Bankers' are a subset of the Family Banker Network
Slide 20: Spain Highlights
39 FY 2014 Foreign Markets Results FY 2014 40 Spain Foreign Markets Highlights € mn FY14 FY13 Change Net Income 21.0 26.3 -20% Managed Assets 1,887.8 1,462.2 +29% Administered Assets 1,095.3 914.1 +20% Total Assets 2,983.1 2,376.3 +26% Gross Inflows into Managed Assets 777.1 537.9 +44% Net Inflows i
Slide 21: Germany Highlights: Bankhaus August Lenz and Gamax
FY 2014 41 Germany – Bankhaus August Lenz Foreign Markets Highlights € mn FY14 FY13 Change Net Income (11.3) (7.0) +61% Managed Assets 195.2 158.6 +23% Administered Assets 79.4 72.5 +9% Total Assets 274.6 230.6 +19% Gross Inflows into Managed Assets 59.1 53.0 +11% Net Inflows into Managed Assets +26
Slide 22: Germany Total Highlights
FY 2014 43 Germany – Total Foreign Markets Highlights € mn FY14 FY13 Change Net Income before impairment (8.4) (4.5) +89% Impairment of CGU ‘Germany’ 0 (4.3) n.s. Net Income (8.4) (8.7) -4% Managed Assets 404.6 372.7 +9% Administered Assets 79.4 72.5 +9% Total Assets 484.0 445.2 +9% Gross Inflows in
Slide 23: January 2015 Net Inflows and Sales Network Ranking
45 Banca Mediolanum Business Update January 2015 Net Inflows € mn – preliminary data subject to adjustment Jan ‘15 Jan ’14 | directly into Mutual Funds 165 173 | through ‘MyLife’ U-L policy 108 - | through other U-L policies 27 12 Mutual Funds Inflows 299 185 Other Life Insurance policies (66) (95)
Slide 24: Net Inflows into Mutual Funds and Market Share
47 Net Inflows into Mutual Funds* Business Update € mn 15000 533 600 10000 400 5000 200 0 0 Jul 00 Jul 01 Jul 02 Jul 04 Jul 05 Jan 06 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 03 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 1
Slide 25: Customer Behaviour and Freedom Account Cross-selling
49 Banca Mediolanum Business Update Customer Behaviour as at 31/12/2014 907,105 primary account holders: …57% of which use Mediolanum as their primary banking institution 706,069 with a 404,392 vs. 365,269 as at 31/12/2013 (no bank account) bank account… In a 2013 survey, 39% of Mediolanum customers
Slide 26: Focus on High-remuneration Deposits
51 Banca Mediolanum Business Update Focus on high-remuneration deposits € mn – as at 31/12/2014 ‘Freedom+’ balances above € 15,000 (current offer*: 1.50%) 2,510 ‘InMediolanum’ time deposits & lock-ins on current accounts (current offer*: 1.70%) 3,828 Launched May 2011 as an aggressive move to acquir
Slide 27: Shareholders and Group Structure
Mediolanum 53 Mediolanum Shareholders & Group Structure Facts as at 31/12/2014 BANKING Banca 100% Banco Bankhaus Mediolanum 100% Mediolanum Mediolanum August Lenz Fiduciaria Doris Group ASSET MEDIOLANUM S.p.A. MANAGEMENT Mediolanum Mediolanum Int’l Mediolanum Gamax 40.4% 100% Gestione Fondi Funds Ge
Slide 28: Multi-channel Banking Model
Mediolanum 55 Mediolanum’s Multi-channel Banking Model Facts Information Automated TV-based Telephone services (Teletext Services & Smart-TV) (VRU / SMS) Cash Entire ATM logistics Mobile apps M network (all platforms) 18,500 Low- 3rd-party branches added-value Internet web site transactions CUSTOMER
Slide 29: Italian Household Financial Assets
Mediolanum 57 Italian Household Financial Assets Facts as at 31/12/2013 – real estate not included Network of Asset Gatherers have only 7.2% of the huge Italian 34.3% Other HH financial assets market, (e.g. cash, entrepreneurial although recognised as best-in- businesses) class in terms of personal
Slide 30: Net Income Trend and Total Net Inflows Trend
Mediolanum 59 Consolidated Net Income Trend Facts € mn 351 337 321 233 224 217 224 212 141 129 131 115 103 88 82 75 67 54 60 49 38 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 2008 & 2010: adjusted net income excluding effects of ‘Lehman Brothers’ operation Mediolanum 60 Banca Medi
Slide 31: Italian Sales Networks Ranking and Family Banker Network
Mediolanum 61 Italian Sales Networks Facts Ranking by Net Inflows € mn - totals by Group 6-YRS PERIOD, 2009 to 2014 Total Net Inflows o/w Managed Assets o/w Mutual Funds* Mediolanum 21.443 12.777 15.369 Fideuram (incl. Sanpaolo Invest) 13.642 19.100 9.092 Unicredit (Fineco) 12.986 9.457 10.450 Banca
Slide 32: Banca Mediolanum Customers and Bank Accounts
Mediolanum 63 Banca Mediolanum Facts Customers Primary account holders (‘000) 894 915 921 897 886 879 878 907 798 840 761 778 785 715 619 465 495 386 410 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Mediolanum 64 Banca Mediolanum Facts Bank Accounts ’000 Since March 2005: all new custome
Slide 33: Freedom Current Account and MyLife Unit-Linked Policy
Mediolanum 65 The ’Freedom’ Current Account Facts launched March 2009, reengineered March 2012 Launched in the wake of the Lehman Bros. bankruptcy, exploited Mediolanum’s unique situation in terms of high liquidity & good reputation Designed to be the best account in the market for HNW individuals:
Slide 34: MyLife Pricing and Brand Awareness
Mediolanum 67 ’MyLife’ Unit-Linked Policy Facts Pricing Initial investment: € 50,000 minimum (lump-sum or through ‘Double Chance’ programmed accumulation plan) Up-front fee: 3% to 0% depending on size of investment (0% above € 1 mn) Insurance fee: 1.75% annually Management fees on underlying funds:
Slide 35: Advertising and Company Culture
Mediolanum 69 Mediolanum’s advertising Facts The most memorable in the banking industry Spontaneous recall of bank advertising in Italy – 2014 14% 10% 8% 7% 4% 3% 2% 1.20% 1% 1% 0.40% source: GFK Eurisko Mediolanum 70 Mediolanum’s Culture Facts Our Competitive Advantage Our ability to generate posit
Slide 36: Investment Advisory Strategy and Open Architecture
Mediolanum 71 Investment Advisory Strategy Facts 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 37: Corporate University and Corporate TV
Mediolanum 73 Training & Communication: Facts Mediolanum Corporate University Inaugurated March 2009 Centralises our training know-how, in coordination with top universities, professors and individuals who are experts in the field Provides our Family Bankers & employees with a resource for life-long
Slide 38: Marketing Events and Market Capitalisation Ranking
Mediolanum 75 Marketing Events Facts 10,238 events held in 2014 (+26% vs. 2013): local & high-level events, sports events (e.g. Giro d’Italia), talk shows, etc. 430,000 participants (customers and perspective customers) per year Results are measurable: Net inflows into managed assets of invited cust
Slide 39: Total Return Index and Disclaimer
Mediolanum 77 MED.MI Facts Total Return Index* 1400 1200 1000 800 600 400 200 0 * includes dividend reinvestment, June 3, 1996 – February 10, 2015 source: Datastream 78 Disclaimer This document has been prepared by Mediolanum S.p.A. for the sole purpose of providing information and presenting the Gr
Slide 40: Investor Relations Contacts
79 Investor Relations contacts Alessandra Lanzone Mediolanum S.p.A. +39-02-9049.2039 Via Francesco Sforza 15 [email protected] 20080 Basiglio MI – Italy Lisa Maxon http://www.mediolanum.com +39-02-9049.2997 [email protected] Luca Mirabelli +39-02-9049.2721 luca.mirabelli@mediol