A welcome gift in anticipation of Christmas, that is a 500 million euro buyback, like it hasn't happened for 15 years. And the perspective of growing profits at the service of dividends beyond forecasts of the operators. This is how he presented himself in front of the analysts Philippe Donnet, CEO of Generali, after a 2021 which, he comments, “was turbulent, even if the group navigated very well as usual”.
2022, easy to predict, will not reserve less agitated waters for the transalpine helmsman. In January, after Donnet's road show for the plan approved by a majority (against Francesco Gaetano Caltagirone, Leonardo Del Vecchio's representative absent at the time of the vote), the pact members let it be known that they will present their industrial project and will follow the team and the list of the board of directors who in their opinion have the skills to execute it. Donnet avoids comments: for now, he lets the goals, all achieved, and the prospects do the talking. On a like-for-like basis, of course. Because if the "pactists", who in any case have already staked 8 billion euros on the Lion, have more ambitious (and expensive) projects in mind, the picture will change.
But at the state of what is known, for the future the conditions for a "leap in quality", stressed Donnet, are already there. Thanks to the investments in digital transformation (1,1 billion euro, with an increase of 60% on the previous level), the increase in profitability of the Life business and revenues from Asset Management, the Leone group sets a series of objectives for the three-year period:
- increase of to evaluate between 6 and 8 percent;
- Cash Flows available at the level of the parent company of over 8,5 billion;
- value of the new one Life production to 2,3/2,5 billion by 2024;
- 100 million additional revenues by third parties in asset management.
And theM&A? The plan allocates "only" 3 billion to this chapter, less in this case than expected by the market which expected at least 4/5 billion. But the figure, indicative, can be revised if the opportunities arise. However, Donnet underlines, “a plan based on M&A is not a plan”, perhaps the only dig at the shareholders, led by Francesco Gaetano Caltagirone, who complain of excessive caution on the shopping front. The 3 billion euro earmarked by Generali's new plan for M&A, Donnet replies remotely, “are a 'good figure. What we want to achieve is a good balance between cash returned to shareholders and capital invested in growth. We will allocate – he continued – 5,6 billion to dividends, between 500 million and 700 million to internal growth and therefore 3 billion remain for mergers and acquisitions”.
We are not interested in size, he added, but rather in "creating long-term value for all shareholders - Donnet then specified - In M&A, one must be very opportunistic, as in the case of Cattolica, which was a huge success", but also “proactive”: in this case, the CEO mentions the La Medicale dossier in France, a company that Generali has been watching with interest for six years and which “will undoubtedly be a success”. Now, in addition to consolidating the presence in Germany, the strategy aims to select opportunities “in markets where we are already present, for example in Asia, as we did in Malaysia, focusing on selected markets. As far as asset management is concerned, where we want to be a global leader, the target is broader and above all includes Great Britain and the United States”.
At the heart of Caltagirone's strategies, from what has been filtered so far, there is a central role for Banca Generali. “I won't comment – the manager replied curtly – The plan for the company will be presented in February and will not concern asset management, but rather a new business unit relating to wealth management”. And by that date, probably, we will know something more about the intentions of the duelists. Starting from the possibility of avoiding a head-on collision in the assembly. In short, white smoke remains far away, but brokers don't mind the prospect. In view of the showdown in which the orientation of the funds will be decisive, the "generosity" of Leo is certainly auspicious. From Equita to Intermonte, passing through Jefferies and Kepler, analysts in chorus they rewarded the rise in earnings estimates (higher than Allianz's), the growth targets and the surprise announcement of the buyback.
