“The plan was approved by the Board of Directors in May 2015 and yesterday I was nominated with Alberto Minali to implement it, in fact we have already started doing it because we are already in March”. This is how Philippe Donnet presented the new course in Trieste at his first public outing as group CEO of Generali for the presentation of the 2015 accounts. A changing of the guard, after the departure of Mario Greco, who moves in the wake of continuity and the desire to implement the plan approved last year. “The company's governance systems have worked in an extraordinary way – commented the chairman Gabriele Galateri di Genola – the important fact is that the board has chosen two people recognized inside and outside the company, two true leaders capable to carry out the approved plan”.
PLAN, TARGETS CONFIRMED
“One of my priorities will be to ensure that the excellent momentum is maintained as we move forward – said Donnet who has headed the group's Italian insurance business since 2013 and who will continue to hold his current positions for now – We have a solid and clear strategy” which “aims to advance our business as a retail leader, to make it simpler and more agile in serving our customers and more generous in rewarding our shareholders”. Of course, when the plan was approved a year ago it already had ambitious objectives. And today, market conditions have not improved since then. But Donnet confirmed the desire to reach the targets that the group has set itself. “The plan hasn't changed – he said – We are even more focused on implementation. It is true that there has been a deterioration in the markets and we will have to make even more efforts on discipline, but the targets of the previous plan were achieved a year ahead of schedule, I think we have demonstrated our ability to achieve even challenging objectives”.
Meanwhile Donnet finds himself at the center of another hot dossier these days: Telecom Italia-Vivendi (the company chaired by Vincent Bollor is Telecom Italia's largest shareholder). In fact, Donnet has sat on the Vivendi board since 2008 and the renewal of his mandate will be proposed at the next Vivendi meeting, on April 21st. “As for my presence on the board of Vivendi, I was appointed CEO of Generali yesterday and I haven't dealt with this issue yet - he said in response to a question - I must say that I will obviously do some reflections and make a decision at the right time ”.
INCREASING DIVIDEND. BUT SUSTAINABLE
SOLVENCY BEATS EXPECTATIONS
The confirmation of the strategic plan targets is one of the aspects that the analysts liked the most, together with the dividend policy and the capital data which turned out to be better than expected. The dividend is up 20% (12 cents per share) to 0,72 per share with a payout ratio of 55,3% from 55,9% in 2014. "Our idea of a dividend - explained the new director general Alberto Minali – it is not surprising the market but having a sustainable trajectory”. The coupon is in line with analysts' estimates and with the group's target of 5 billion euros in total dividends by 2018. “Our goal of 5 billion euros in cumulative dividends by 2018 is well in sight”, Galateri also commented during the presentation of the results. “I know I speak not only for myself – he added – but also on behalf of the other members of the board when I say that we are committed to ensuring that Generali remains an attractive long-term investment. A key part of this is paying a dividend that is both sustainable and progressive."
At the same time the group has filed a solvency ratio of 202% calculated entirely on the basis of the internal model and at 175% on a regulatory basis (70% of the business with the internal model and 30% temporarily under the standard formula).
THE TITLE SLIDES ON THE PROFIT
In Piazza Affari, however, the share slips by 1,59%. The market is currently focused onnet income slightly lower than expected: profits in 2015 in fact stood at 2 billion compared to the 2,2 expected by the consensus. In particular, the analysts of Barclays underline in a note, the net profit for the fourth quarter is disappointing at 304 million (-37% compared to the consensus) on which the impact of the stake in the Brazilian Btg weighs. However, the operating result (+6,1%) and the operating Roe +14% (above the target >13%) were confirmed as solid. Finally, no involvement with a possible Bmps dossier: “No initiative on MPs has ever been proposed to us. It does not form part of Generali's strategic plan to help banks”, general manager Minali dismissed the rumors of an involvement of the Trieste company in a plan in favor of MPS.
