The integration of Catholic will generate synergies higher than expected. Not only, Generali it will have “no impact” from newcomers IFRS 17 and IFRS 9 accounting principles on cash and capital generation, on net holding cash flow, on dividends and on Solvency. These are the innovations communicated by the Leone company through a note regarding the implementation and expected impact of the new accounting standards Ifrs 17 and Ifrs 9.
Generali also underlines that "the new accounting standards will significantly improve the visibility and predictability of profits generated in the Life segment, without any impact on cash and capital generation, net holding cash flow, dividends and solvency".
General: stable operating profit and shareholders' equity, 2024 targets confirmed
The company has confirmed i plan target for 2024 even with the entry into force of the new accounting standards. The net assets expected by the group will remain unchanged even under the new accounting standards compared to the end-2021 level as well as Generali the consolidated operating result.
Finally, the 'Contractual Service Margin' – the insurance liability which represents the present value of future profits – is expected to be around 33 billion at the time of the transition to Ifrs 17, “reflecting the profitability of the existing Life business”.
Catholic acquisition: synergies higher than expected
Generali also provided updates on theacquisition of Cattolica which is showing "superior synergies than were initially expected", underlines the company. In detail, by 2025 it is expected that the amount of synergies between 120 and 130 million, before taxes, a much higher estimate than the 80 million expected by 2026, previously indicated in the information prospectus of the tender offer.
Furthermore, the group now expects a normalized net income to 2024 of the core businesses Catholic of 145 million. Compared to initial expectations, "this would translate into an additional contribution of 0,4 percentage points by Cattolica to the growth of earnings per share in the period 2021-2024 as part of the group's strategic plan".
Finally estimated that always the core activities of Catholic in 2025 they will record a net profit between 171 million and 178 million.
“Generali is perfectly in line on the path for unlock Cattolica's potential“, explained the Group General Manager, Marco Sesana, speaking at the Investor Update of the Lion in the session aimed at providing an update on the integration with the Veronese company, which will be merged into Generali Italia in the second half of 2023 and will express his “full potential” in 2025.
The synergies higher than expected, added Sesana, confirm that Generali is the best possible owner for the asset. Furthermore, the management team is totally focused on achieving the maximum possible synergies by 2025.
At Piazza Affari, the general title gains 0,8% to 17,405 euros, reaching the highest since May 2022.
