There is no need for a capital increase because “the results are excellent” confirming that the Leo formula is the right one. Philippe Donnet, CEO of Generali, opposes the philosophy of numbers, much appreciated by Piazza Affari, to any attempt to involve him in any reference to the "Entente affair”, or the alleged takeover attempt, real or presumed, which convinced the company to acquire a 3% stake in the bank.
“Climbing does not exist“ syllable the ceo. And what will you do with Intesa's shares? “It is not my habit to comment on individual investments”. And as a thoroughbred rugby player, Donnet blocks any other attempt to extract any reference to the big yellow, indeed to "fairy tales", as the CEO defines them. Reticence? Excess of reserve? No, Monsieur Donnet simply does not want the fruit of his work, starting with the acceleration of cost reduction, to be obscured by the eternal (most often imaginative) risk that surrounds the fate of the great treasure of Trieste, which, among the other contains 66.121 million Btp, one of the keys that make the leading financial force of the Bel Paese truly strategic.
The leap forward of the title, consistently around 3% after that the announcement of the 2016 results, confirms that Donnet's pride is well placed. The company is preparing to distribute a dividend per share of 80 cents (+11,1% compared to 72 cents at the end of 2015) exclusively the result of cash flow generation of 1,9 billion, in full compliance with, indeed anticipating, the roadmap promised to shareholders (out of the total 5 billion expected between 2015 and 2018 has already been awarded half). They accelerate cost-saving programs. "We had promised - says Donnet - 200 million by 2019. But we brought the goal forward to 2018", along the lines of what has already been done in the last eight months of 2016 (cuts of 78 million).
Cost cutting, as well as the difficulties encountered in a "problematic" year for Italian finance, did not hinder profitability. Indeed, the Leone di Trieste group closed 2016 with results above expectations with net profit growing to 2,1 billion euros (+2,5%) and a record operating profit of 4,83 million (+0,9%). Furthermore, for 2018, Generali confirmed the main financial targets, including that of a cumulative net operating cash of over 7 billion.
On the industrial front, total premiums amounted to 70,5 billion with an overall drop of 3,9%: the Non-Life business grew (+2,1%), the Life segment was slow (-6,3% ), due to the slowdown in the offer of traditional businesses and the "more disciplined" approach on the supply side. Finally, from a financial point of view, the Regulatory solvency ratio (solvency ratio) which applies the company's internal model only in countries for which it has been approved by the authorities, rose to 177% from 171%, while the Economic Solvency ratio, which applies the internal model to entire perimeter, fell to 194% from 202%.
It emerges from these numbers a solid business along consolidated tracks. We proceed on the divestment front, but without haste: "The sale of assets continues, but we will communicate our choices only after the fact. We have not set a deadline”. The company plans to raise €1 billion from the sale of assets in 13 countries which make up 4% of the group's premiums but zero profits.
Acquisitions? “We are opportunists, we will look at opportunities if they allow us to accelerate the execution of our plan,” Donnet explained, noting that at the moment there is nothing on the table. And to the agents who have asked to preserve the independence of the company through a raise, Donnet replies: “They are very attached to the independence of the group. Sharing this vision, I can reiterate that a capital increase is not on the agenda because there is no need”. Finally, the banking nodes. Generali has written down its stake in Atlante by 52% (“a very prudent solution”). And Monte Paschi? “For now we are not shareholders, but creditors. We will see the bail-in ”.
In the meantime "We look to the future with confidence, as an independent, Italian group with an international vocation”, concludes Donnet.
