Eight fewer syndicate agreements, a new logo that will apply to the whole group and a growing dividend. Mario Greco speaks from Investor day in London, announces a new logo, reassures about the dividend and recalls the work done up to now with a view to increasing the market. And it spares no more than a jab at the S&P rating agency which yesterday put the company's rating under creditwatch in relation to a new assessment methodology which considers Generali 100% Italian and which therefore suffers the effects of country risk.
“I don't deal with politics, in Generali I already have enough to do – said Greco – What I read behind the S&P decision is a sensational mistake”. The manager who is betting a lot on the international dimension of the Lion did not mince words: "First of all, these gentlemen do not look at the numbers, when three quarters of the investments are outside Italy". And again: “Either they are low in numbers or I don't understand how it works. They have now discovered that there has been a euro crisis. They find out when spreads are at their lowest in recent years, Italy is emerging from the crisis, the deficit is below 3%, GDP is recovering” and Generali made 2,4 billion divestments with the “best results of last five years". And again: "In this context they come (the people of S&P, ed) and say show us what happens if Italy fails, I say: where have they lived in these years?" He finally specified: "I don't think there is a great hand, a great intelligence behind these things, it is that we entrust a responsibility which is to judge" to these people. “I don't know what it is for these gentlemen to do this job”. In terms of Italian government bonds, it emerges from the material for the Investor day that Generali will have an exposure of 55 billion at the end of 2013, from 55,5 billion at the end of September and from 58,5 billion at the end of 2012.
As regards write-downs on investments in private equity and alternative funds, Greco reassured that "there is nothing suspended in an accounting limbo".
On the dossier Sace Greco has instead ruled out an interest. "It's not one of our priorities" and in any case "no one has proposed it to us", she said. We will then have to wait for the new assessment requested by IVASS on the liability action against the former CEO Giovanni Perissinotto and the former financial director Raffaele Agrusti, which most likely will not be on the agenda of the December 6 board meeting. “I don't think so, I think it's too soon,” he said.
THE NEW UNIQUE LOGO
MINUS 8 UNION AGREEMENTS
Generali presented a new group logo at the Investor Day. The symbol of the company, which depicts the Lion of San Marco, used by Generali since the 150th century, had not been modified for over twenty years and was used until now with different variations, depending on the country, accompanying the image of the lion and the name Generali to that of the town. Now it has been redesigned and will unify the over 2014 group logos around the world in a single "Lion". The new logo will therefore also be used from XNUMX for companies other than the parent company, thus eliminating the use of the image of a "cut" lion.
In terms of syndicate agreements, Greco recalled that the Lion has already come out "of 8 syndicate agreements that were about to expire and regained the availability of assets for their more appropriate management". In particular, the group has exited the agreements of Gemina, Prelios, Ntv, Telco, Mediobanca, Agorà, RCS and Pirelli.
DIVIDEND IN GROWTH FROM NOW TO 2015
SOLVENCY 1 INDEX CONFIRMED ABOVE 160% BY 2015
Mario Greco, CEO of Generali, sees "a dividend policy that will grow over time once the capital targets are reached". This, however, means that dividends will also grow between now and 2015. "I wouldn't say that dividends will remain stable until 2015 - he said - also because it would be difficult to understand stable with respect to what". On the other hand, Greco wanted to underline the "excellent progress made in the reconstitution" of the group's capital. "We confirm the targets already set - he said - and introduce new targets in order to present our shareholders with a clear action plan to obtain higher returns in the short term". More than 60% of the €4 billion divestment target has been completed and greater focus has been placed on the core insurance business. Thus the group confirmed the Solvency 1 index of over 160% by 2015. The group then indicated a new target on the debt leverage ratio (ratio between debt and assets) of less than 35% by 2015, compared to the current level at 40%.
OPERATING ROE AT 13% BY 2015
GREEK OPTIMISTIC ON THE QUARTER
Generali then confirmed the target of an operating roe, the return on equity, of 13% by 2015. The group, as announced in a note, expects gross operating benefits of 1,6 billion by 2015, thanks to a target cost savings of 750 million by 2015 and 1 billion by 2016, and with 750 million gross benefits from technical excellence initiatives by 2015. Savings are based on the identification of 9 programs ranging from sales support to procurement , IT infrastructure, facility management and claims management. The company then underlines that it has launched 120 initiatives in recent months, which are worth 60% of the total expected savings, allowing for 200 million savings in 2013. Greco has ruled out "extraordinary personnel restructuring programs in any country". "Certainly - he specified - we will limit the level of employment in some countries, but we do it in an ordinary way, working on turnover and early retirement". In Italy, the greatest benefits of the restructuring "will come from 2015, not before". He ruled out acquisitions. "We're not looking at expansion through acquisitions," Greco said, even though the company "needs to grow."
On the current quarter, Greco confirms the trend of the first nine months, stating that he does not see "significant changes compared to the previous quarters, without deterioration or evident improvements", and says he is "optimistic" on the objectives for 2015.
